The number of empty tankers sailing to Middle Eastern oil producers is falling further as some shipowners steer away from the Strait of Hormuz, according to industry data and officials, as regional conflict risks rise after the US joined Israel’s bombing campaign against Iran.
Initial data from S&P Global Commodities at Sea(opens in a new tab) shows that globally, 699 unladen crude and product tankers were destined for the eight countries with oil export facilities — including Saudi Arabia — as of June 22, down from the daily average of 730 on June 15-21 and 741 on June 8-14.
When adjusted for seasonality, the latest daily reading was the lowest since 2021.
“Some shipowners have already paused transits in the Strait of Hormuz due to the deterioration of the security situation” after the US attack on Iran, BIMCO Chief Safety Officer Jakob Larsen told Platts.
US-listed, Ireland-based product tanker operator Ardmore recently canceled a spot charter deal to transport oil from the Gulf for Chinese firm Rongsheng due to worsening security situation, according to sources familiar with the matter.
Major tanker operators like Stena Bulk, NYK Line and Mitsui O.S.K. Line have not halted trading in the region but have enhanced security measures and will evaluate each deal on a case-by-case basis, the companies said.
“Before the US attack, the impact on shipping patterns was limited. Now, after the US attack, we have indications that the number of ships passing is reducing,” Larsen said. “If we begin to see Iranian attacks on shipping, it will most likely further reduce the number of ships transiting through Hormuz.”
CAS data suggests 19 oil tankers have passed through the chokepoint that supports over 30% of global seaborne oil flows as of 1112 GMT on June 23, compared with a daily average of 44 on June 16-22.
Security consultancy Ambrey said in a note that Iran’s response to US strikes on nuclear facilities was “likely to include attacks or seizures of US-affiliated shipping.”
Ambrey added that a least five merchant ships destined to enter the Persian Gulf made a U-turn or opted to wait, of which at least two were not linked to the US, reflecting broad concerns among the shipping industry.
Escalation risks
Israel has begun its latest round of air strikes on Iran since June 13 in the two countries’ worst direct military conflicts in decades, while the US joined the campaign on June 22 by striking three key Iranian nuclear facilities. Iran retaliated by attacking US military bases in Qatar and Iraq on June 23.
Iran’s parliament is still debating whether to close Hormuz, a 33km-wide waterway, the state-run ISNA news service reported. Any such decision would require higher-level approvals, including from the Supreme National Security Council, before becoming effective.
Many analysts believe a full closure is highly unlikely as it would hurt the economies of Gulf producers, including itself, and oil consumers like its key trading partner China. Some suggest US and Israeli ships would be targeted.
Five publicly US-affiliated merchant ships have departed the Persian Gulf since the US military operations, while none have entered, according to Ambrey. Several US-flagged ships have gathered in UAE territorial seas.
The development came as some market participants suggested Persian Gulf shipping faces severe congestion amid heightened security risks, with a backlog of as long as nearly 1,000 ships since last week.
Source: Reuters