In the week ending July 20, the Strait of Hormuz, a narrow channel through which roughly a fifth of the world's oil has long moved, grew nearly empty as fighting between the United States and Iran resumed. Ships that once threaded its waters in steady numbers have largely turned away, and the change has come quickly enough to unsettle anyone who depends on the sea lanes of the Gulf. Yet the feared surge in oil prices has not arrived: a mix of slackening Chinese demand, a surge of American production, and a historic release from emergency reserves has kept the market from the spiral many once p
Hormuz Traffic Plunges Two-Thirds as Tankers Avoid Strait Amid Renewed U.S.-Iran Hostilities
Iran has reportedly struck vessels not using the Tehran-approved route, though casualties are not detailed in the source.
Daily crossings fell from more than 20 to the single digits.
Mark
Sixty-six percent is a huge drop in a week. What exactly was measured?
Mimi
Vessels crossing the strait in the week through July 20: 53, per Lloyd's List Intelligence. Kpler's data shows daily crossings going from more than 20 before July 15 to single digits.
Mark
And yet oil didn't explode. Why not?
Mimi
Several things offset it. China's crude imports hit a nearly decade-low by June, U.S. output reached a record 13.93 million barrels a day by April, and 400 million barrels were released from the Strategic Petroleum Reserve in March.
Luke
Careful with causation, though. The reporting lists these factors as helping, but it doesn't say how much each one mattered.
Mark
Fair. What about the attacks on ships?
Mimi
Iran is reported to have struck vessels not using Tehran's approved route. That's why traffic fell so fast.
Luke
Reported is the key word. The piece doesn't detail the attacks, any casualties, or which ships were hit. We know traffic fell, not exactly what happened to each vessel.
Mark
Are the price numbers solid?
Mimi
Brent's $126 peak and the $101 average come from Reuters and the story's own accounting. Brent is back above $90, WTI at $84.45.
Luke
Those are snapshots. And the forward question is open: the source says plainly it's unclear what happens if fighting continues for long. Nobody can say yet.
Der Puls
- Only 53 vessels slipped through the Strait in a single week, a 66 percent collapse that has left the world's most important oil corridor almost silent.
- Iran has struck ships that strayed from the route Tehran approved, turning a shipping lane into a zone of fear for every captain deciding whether to sail.
- Brent crude spiked back above $90 after briefly sinking near $70, as traders swing wildly between relief and dread with each new round of fighting.
- Chinese import slowdowns, a record 13.93 million barrels a day of American output, and a 400-million-barrel reserve release are holding the line against the $150-to-$200 nightmare.
- The cushions are finite, and if hostilities drag on, the market faces a test it has not yet had to pass.
In the week ending July 20, the Strait of Hormuz, a narrow channel through which roughly a fifth of the world's oil has long moved, grew nearly empty as fighting between the United States and Iran resumed. Ships that once threaded its waters in steady numbers have largely turned away, and the change has come quickly enough to unsettle anyone who depends on the sea lanes of the Gulf. Yet the feared surge in oil prices has not arrived: a mix of slackening Chinese demand, a surge of American production, and a historic release from emergency reserves has kept the market from the spiral many once predicted. Whether these buffers can hold through a longer war is the question now hanging over the water and the markets alike.
In the week through July 20, only 53 vessels crossed the Strait of Hormuz, a drop of 66 percent from the week before, according to Lloyd's List Intelligence data. Tankers that normally pass through the narrow waterway have been staying away since the United States and Iran resumed hostilities. Data from Kpler shows how quickly the change arrived: before July 15, more than 20 ships crossed each day, and last week the count fell into the single digits. Iran has reportedly struck vessels that did not follow the route Tehran has approved. The source does not detail any casualties.
When the conflict intensified in late February, many analysts warned that Brent crude could surge to between $150 and $200 a barrel if the strait were disrupted. That did not happen. Brent peaked near $126, and after a halt in U.S. strikes in June, prices briefly dropped to about $70 in early July. Renewed escalation pushed them back above $90 on the latest trading day.
Several forces have kept the market from spiraling. China, the largest crude importer, bought less oil rather than stockpiling, with imports falling to their lowest level in nearly a decade by June. The United States lifted output to a record 13.93 million barrels a day by April and, with the International Energy Agency, released a record 400 million barrels from its Strategic Petroleum Reserve in March.
The open question is how long these cushions will last. Prices have held so far, but no one knows how the market will behave if the fighting continues after these measures have been spent.
In the week through July 20, just 53 vessels made the crossing through the Strait of Hormuz. That is a drop of 66 percent from the week before, according to Lloyd's List Intelligence data cited by CNBC. The tankers that normally move through the narrow waterway are increasingly staying away since hostilities between the United States and Iran resumed.
Data from Kpler points the same way, and it shows how fast the change came. Traffic fell right after the fighting started again. Iran has struck vessels that were not following the route Tehran has approved. Before July 15, daily crossings averaged more than 20. Last week they fell into the single digits. The source does not detail any casualties from the attacks on ships.
The strait carries roughly one-fifth of the world's oil supply, which is why its closure was long treated as the worst-case scenario for energy markets. When the conflict intensified at the end of February, many analysts warned that Brent crude could surge to between $150 and $200 per barrel if Iran managed to disrupt traffic. The all-time record is nearly $147, set in 2008.
That is not what happened. According to Reuters, Brent peaked at about $126 a barrel. Between the start of the conflict on February 28 and June 11, when President Donald Trump announced a halt to U.S. strikes on Iran, prices averaged around $101. Fighting later resumed, but oil briefly fell back to about $70 a barrel in early July. As hostilities escalated again, it bounced back. On the latest trading day, Brent rose more than 2 percent and went back above $90, while West Texas Intermediate, the U.S. benchmark, made similar gains and stood at $84.45 at 9:54 a.m. ET.
Several factors have kept prices from spiraling. One of the biggest surprises came from China, the world's largest crude importer. Rather than buying more to build strategic reserves, China saw its crude imports fall by June to their lowest level in nearly a decade. The reasons were varied. China curtailed fuel exports, shifted faster toward electric taxis in place of privately owned gasoline cars, and its petrochemical industry cut processing volumes. Traders had expected stronger demand, and the slowdown eased pressure on the market.
The United States also helped. As the world's largest oil producer, it lifted crude output to a record 13.93 million barrels per day by April, offsetting some of the supply risk. In March, Washington coordinated with the International Energy Agency to release a record 400 million barrels from the Strategic Petroleum Reserve, adding supply and cushioning the disruption.
What remains unclear is how long those cushions can last. Prices have held up so far, but it is not known how they will behave if the fighting drags on after all of these measures have been used.
Bemerkenswerte Zitate
Iran has struck vessels not going through the route approved by Tehran, and daily crossings fell to single digits.— Kpler data, as reported by International Business Times
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