Over the weekend, shipping traffic in the Strait of Hormuz came to a near standstill, with only five cargo ships passing on Saturday and none on Sunday, a significant drop from 31 vessels the previous weekend.
This decline follows a three-month low in shipping activity, with an average of just 13 vessel transits recorded on Tuesday, reflecting a 90% decrease since the onset of the conflict on February 28. The Strait of Hormuz is crucial for global oil transport, accounting for about 20% of the world's oil supply, which typically sees around 130 vessel transits daily.
Oil prices reacted to this uncertainty, with Brent crude futures falling 0.15% to $88.45 per barrel and U.S. West Texas Intermediate crude down 0.74% to $81.79. As the ceasefire nears its end, negotiations between the U.S. and Iran appear stalled, with Iranian officials denying any ongoing discussions.
This situation raises concerns for investors about potential disruptions in oil supply and market volatility, as highlighted by HSBC shipping expert Parash Jain, who noted that 'chaos is the norm' in the industry during such geopolitical tensions