MSC partially resumes Suez Canal transits

On August 25, vessel traffic through the Strait of Hormuz remained restricted, despite reports of an imminent agreement between Iran and Oman to regulate maritime passage in the crucial waterway. According to vessel tracking firm Kpler, only five ships navigated the Strait on that day, a notable drop from seven the previous day.

All five vessels utilized the Iranian Unilateral Scheme, with two vessels entering the Persian Gulf and three exiting into the Gulf of Oman. Four of these ships were designated as shadow vessels, while one was sanctioned. Iran's semi-official Fars News Agency reported that Iran and Oman have been in discussions for the past month and have reached an agreement, which both sides have accepted.

An Indian oil tanker, Haana, was seen entering the Persian Gulf via the southern route, or Oman Corridor, but turned back after receiving a warning from the Islamic Revolution Guard Corps (IRGC) of Iran. Recent data indicates that only three vessels have transited the Strait in the last 24 hours, as per the Strait of Hormuz tracker.

The Strait's closure, while having a limited impact on container shipping due to its minimal contribution to global container capacity, has led to higher rates due to rising bunker fuel prices. However, a full return to the shorter Red Sea and Suez Canal route appears more probable as several shipping companies have announced partial resumption of services through this trade lane.

The prolonged absence of commercial vessels from the Red Sea/Suez Canal route stems from attacks by Yemen-backed Houthi rebels over the past three years. Nonetheless, the Houthis have threatened to continue targeting Saudi oil tankers passing through the Bab al-Mandab Strait, leading to a cautious approach towards the Suez route's revival.

Despite this, Mediterranean Shipping Company (MSC), Maersk, and Hapag-Lloyd have announced partial returns to the Asia-Europe service via the Red Sea and Suez Canal. If this trend continues, a full normalization of the Suez Canal route by the end of 2026 could be feasible. This development could release substantial shipping capacity and exert downward pressure on container rates, which have been at their highest since 2024.

Chemical industry operations, particularly those involving containerized cargo such as polymers (polyethylene and polypropylene) and titanium dioxide (TiO2) in containers, as well as liquid chemicals in isotanks, could benefit from this potential capacity release and reduced shipping costs.