Uncertainty in Strait of Hormuz threatens fragile ceasefire
The fragile ceasefire between Iran and the United States has done little to stabilise the economic outlook in the Middle East. Traffic in the Strait of Hormuz, a vital artery for global energy supplies, remains at a virtual standstill despite the agreement.
Shipping traffic through the strait remains sharply reduced. Only a handful of vessels have attempted the passage within a 24-hour period, compared with around 140 daily crossings before the escalation in late February, Reuters reported on Thursday.
The main deterrent is the persistent fear of sea mines. While their presence has not been confirmed, even the suggestion of mines is enough to disrupt maritime traffic, analysts say. Iran is believed to possess between 2,000 and 6,000 naval mines, and only a small number would be needed to create widespread uncertainty.
Iran's Islamic Revolutionary Guard Corps has instructed vessels to sail through Iranian waters near Larak Island to avoid potential mines in the usual shipping lanes, according to Iran's semi-official Tasnim news agency. Despite the guidance, the risk seems too high for many operators, particularly those linked to the United States or Israel.
The situation is further complicated by reports that Iran plans to impose a toll of 1 dollar per barrel on oil tankers transiting the strait. For large vessels, this could amount to additional costs of millions of dollars. US president Donald Trump has warned Tehran against introducing such tolls, saying the move would violate the terms of the temporary ceasefire.
Economic consequences
Experts predict that the price of Brent crude oil could double to 190 dollars per barrel if shipping traffic remains at current levels. Even if a broader agreement is reached, it may take time for the oil supply chain to recover. Around 25 per cent of the world's oil supply passes through the Strait of Hormuz.
Oil supply is under further strain following recent attacks on Saudi Arabia, which have reduced production capacity by around 600,000 barrels per day, according to the state news agency SPA. The country's oil throughput has also been reduced by 700,000 barrels per day by damage to its East-West pipeline, which allows crude oil to bypass the Strait of Hormuz.
A navy vessel is seen sailing in the Strait of Hormuz © PHOTO SAHAR AL ATTAR / AFP
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