Shipping traffic through the Strait of Hormuz sank to its lowest level of the war over the weekend, according to Kpler data reported Monday by CNBC: three vessels passed through the chokepoint on Sunday against roughly 130 crossings a day before the fighting began on February 28, and the five-day average of transits stands at 12. [1] The waterway that once carried about one-fifth of the world's oil and liquefied natural gas is now moving less than a tenth of one percent of its prewar hull count on a bad day. [2]
Sunday's edition recorded seventeen percent still holding on UKMTO's count of 151 vessels across the prior week. Monday's table is thinner than anything since the blockade began.
The Weekend Ledger, Reconciled
The weekend numbers deserve precision because even the trackers disagreed with themselves. Kpler's early Monday snapshot registered five commodity vessels through the strait on Saturday and none yet logged for Sunday, against 31 for the previous weekend. [2] The day's later accounting put three hulls through Sunday. [1] Either reading lands in the same place: a strait built for two-digit daily traffic counted single digits for the whole weekend while Reuters photographers shot tankers at a standstill from the Omani coast at Musandam. [3]
Prices Shrug, Contracts Move
The market's reaction was a study in exhaustion. Brent crude rose 55 cents to $89.07 and West Texas Intermediate added 17 cents to $82.57, after a week in which both benchmarks gained more than 5 percent following attacks on ADNOC-operated tankers in the strait and on a Saudi Aramco refinery. [2] Bjarne Schieldrop at SEB Research told clients prices would not move substantively unless the nighttime flow of crude out of Hormuz halts or Bab el-Mandeb closes too; Naga.com analyst Frank Walbaum noted that restricted shipping and stalled negotiations together cap any decline. [2]
HSBC's shipping analyst Parash Jain had blunter advice for investors on Squawk Box Europe: understand that "chaos is the norm" for the industry now and price it into base assumptions. [1]
Baghaei's own account of the Oman talks explains the owners' caution better than any bear case. The negotiations take a long time, he said Monday, because of the complexity of the subject, the number of actors involved, and countries seeking to undermine the process. [2] A lane whose reopening depends on untangling all three is not a lane an underwriter can price this quarter. Iran's foreign ministry insists talks with Muscat are continuing "in earnest" even as Washington threatens to bomb the mediator. [3] Nothing in that sentence invites a booking.
Replacement Procurement Is the Quiet Story
The divergence this desk watches is not price versus panic. It is route visibility joined to contract performance, and Monday supplied a clean data point: ADNOC sold at least 14 million barrels of spot crude to Asian refiners at premiums in its latest tender, trade sources said, rerouting barrels around the contested water rather than waiting for anyone's map to reopen it. [2]
That is the second-order economy the headlines miss. Asian buyers are paying up for Gulf barrels delivered without Gulf transit; owners are keeping hulls out because insurers still will not price a lane Iran claims to command and Washington claims to control; and the gap between those positions is being filled, barrel by barrel, at someone else's premium. Iran's stated price for reopening remains maximal, including lifting the American blockade, withdrawing US forces from around Iran, and paying war reparations. [4]
Three hulls a day is what all of that looks like in a ledger. Owners do not book rhetoric. Until an insurer can read the Oman track's unpublished map and underwrite it, the market's answer to every diplomatic announcement will stay exactly this small.
-- THEO KAPLAN, San Francisco