Substantial Halt in Strait of Hormuz? At Least 40 VLCCs Stranded in Persian Gulf

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In the Persian Gulf, dozens of ultra-large oil tankers fully loaded with crude oil are waiting in place. After attacks on the Strait of Hormuz, this most crucial global energy channel is effectively closed, regional logistics are in chaos, oil exports have slowed sharply, and the outlook for production faces severe threats.

According to Bloomberg on Monday, ship-tracking agency Kpler data show that at least 40 ultra-large crude carriers (VLCCs) are currently stranded in the Persian Gulf, each carrying about 2 million barrels of oil. Multiple shipowners and captains stated they are waiting for the security situation to become clearer before deciding whether or not to attempt passage through the strait. Meanwhile, more than half of the world’s largest marine insurance associations have suspended war risk coverage for ships entering the Persian Gulf.

The sharp decline in traffic has already unsettled importing countries. If the crisis lasts for weeks, oil-producing countries will be equally hard hit. JPMorgan analysts estimate that if the strait remains effectively closed for more than 25 days, oil-producing countries may be forced to cut production.

Plummeting Traffic, Effective Strait Closure

After the U.S. and Israel launched strikes against Iran, vessel traffic through the Strait of Hormuz dropped sharply. Ship-tracking platform Vortexa showed that on March 1, only four supertankers passed through the strait, compared to 22 the previous day.

Although Iran has not officially announced the closure of this vital passage, it has warned ships not to pass through. As of Monday morning, at least three vessels had been attacked. The latest victim is the "Sea La Donna," and details of the incident are still under investigation. The Joint Maritime Information Centre (JMIC), a multinational naval advisory institution, has raised the area's security alert to the highest level, "critical," citing that "multiple merchant ships in the Gulf of Oman, the Musandam Strait entrance, and UAE coastal waters have been confirmed attacked by missiles and drones."

In the past 24 hours, only a few large oil tankers exited the strait. Ship-tracking data shows that near the strait entrance are only two Iranian oil tankers sanctioned by the U.S.

Shipowners Wait and See, Insurers Withdraw Coverage

Facing escalating security threats, the shipping industry is generally adopting a conservative approach. Major shipping companies have advised their ships to wait in place. Fearnley Securities analysts Fredrik Dybwad and Sigurd Gjone Gabrielsen wrote in their research report: “Given recent developments, inefficiency may further worsen, and we expect shipowners to generally take a wait-and-see attitude.”

The withdrawal of insurance coverage has further increased the severity of the situation. The world’s largest and third-largest ship flag registries—Liberia and Marshall Islands—have required ships to implement the highest safety level, which means cargo loading and unloading must be suspended.

It is worth noting that the actual number of stranded ships may be much higher than indicated by tracking data. Many vessels choose to turn off their transponders to “go dark” and reduce risk; signal interference also increases tracking difficulty.

Oil Producers Facing Shutdown Pressure, LNG Supply Also Affected

The impact of the crisis goes beyond crude oil shipments. The Strait of Hormuz is also a key global channel for liquefied natural gas (LNG). Qatar is the world’s second-largest LNG exporter, accounting for 20% of global supply last year, with all exports passing through the strait to buyers in Asia and Europe.

For oil-producing countries, if the crisis persists, the consequences could be even more severe. Storage facilities in the Persian Gulf are limited, and the number of available empty ships is also insufficient. If the crisis lasts for weeks, oil producers may face full storage tanks and be forced to cut production. JPMorgan analysts estimate that an effective closure of the strait exceeding 25 days could trigger compulsory production reductions.

In addition, several container ships have stopped or turned back while passing through the strait. The spillover effects of the crisis have spread to the Red Sea—Yemen's Houthi militants have continuously attacked passing merchant ships and recently threatened to resume attacks on cargo ships. Several of the world’s largest container carriers have begun rerouting to avoid risks in the Red Sea.

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