Strait of Hormuz disruption slows oil shipments
Traffic through the Strait of Hormuz has dropped from about 125 large commercial vessels a day to roughly a dozen on some weekends as shipowners switch off AIS transponders and avoid the corridor. Producers are keeping crude moving with shuttle tankers, ship-to-ship transfers and longer voyages, allowing exports to recover to around 6.5 million barrels per day but at much higher cost, with freight above $30 per barrel and VLCC hires exceeding $1 million per day. The result is strained tanker capacity, higher transport costs and elevated supply risk for Asian and European markets.
Hormuz disruptions are raising global oil transport costs and supply risks
Context
There have been attacks and rising security risks around Hormuz and the Red Sea. Shipowners are avoiding the strait or switching off AIS, and exporters use shuttle tankers and ship-to-ship transfers. If dangers continue, transport costs…
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