Ceasefire sparks hope but Iran still ‘in control’ of Hormuz

• Backlog of more than 800 ships
• Laden vessels to be prioritised
• Risk of navigational hazards

A temporary US-Iran ceasefire has triggered preparations for vessels to begin leaving the Strait of Hormuz, but experts said Iran remains the gatekeeper of traffic through the chokepoint.

The truce has raised “a lot of hope”, Lloyd’s List editor-in-chief Richard Meade said, but it would take time to clear a backlog of more than 800 ships stranded in the Gulf since late February. 

Transits are still being negotiated on a ship-by-ship basis, he said, via the Islamic Revolutionary Guard Corps (IRGC). Meade said expectations needed to be “tempered” on how quickly the Gulf could return to normality.

“Everyone is still waiting to see what happens next. You can’t move a huge amount of ships through this safely,” he told the BBC. “There’s a lot still to be unwound here. But the reality is Iran is still in control of this trade.”

Oil plunged on Wednesday to below $100 per barrel and stock markets worldwide rallied following a two-week ceasefire agreement between the US and Iran and a pledge by Tehran to reopen the strait during that period.

Shipowners will prioritise moving laden vessels out, carrying an estimated 20,000 seafarers, while one charterer had already sounded out the cost of sending empty ships back into the region, according to Lloyd’s List.

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Bimco, one of the world’s largest shipping associations, warned that leaving the Gulf without coordination with the US and Iran “would entail heightened risk and would not be advisable”.

Some countries had already negotiated passage for the past few weeks, said Meade: “They are negotiating passage on a ship-by-ship basis. The information is being lodged with the IRGC via agents in Iran. This is a fairly lengthy negotiation. They are allowing ships with no affiliation to the US and Israel to go through but only after checks and only after approval.”

Jakob Larsen, Bimco’s chief safety and security officer, warned against an “uncoordinated exit”.

“If too many ships attempt to transit at once, due to the confined nature of the Strait of Hormuz, there is a heightened risk of navigational hazards like grounding or collisions,” he said.

He added that recent attacks on Iran’s military command structure could create confusion between the authorities approving passage and the units controlling weapons systems.

“Such misunderstandings could potentially lead to unintended targeting and attacks on ships approved for transit,” Larsen said.

Iran still had significant capabilities to control shipping through the strait, including anti-ship missiles, drones, fast attack craft, coastal artillery and mines, he added.

Niels Rasmussen, Bimco’s chief shipping analyst, said vessels would load cargoes before leaving where possible, but only if this did not jeopardise their chance of exiting within the two-week window.

Unless the truce is quickly extended, Rasmussen said he doubted there would be “a large influx of ships into the Gulf”, partly because many vessels had already repositioned elsewhere and partly because owners would not want to risk being trapped again.

“Even if we return to normal after the two weeks, oil exports will be impacted for some time as production needs to be restarted at several fields and as damage to infrastructure needs to be repaired,” Rasmussen said.