THE MARTIME  EXECUTIVE

Traffic levels in the Strait of Hormuz are showing signs of improvement as a formal plan for outbound transits begins to take effect. 31 crossings occurred on June 23, according to Kpler, including all vessel classes and traffic lanes. 

Accurate assessments are challenging because much of the traffic is operating dark - not just AIS-dark, but maintaining complete radio silence to minimize detection and tracking. Based on all available sources of information, Windward assesses that traffic levels are currently running at about 35-40 vessels per day - about three times the levels seen a few weeks ago, but still just one quarter of prewar volume. 

Notably, Windward has observed some vessels using a new "central" corridor just north of the TSS - outside of the Omani and Iranian lanes on the south and north sides (respectively). The central region of the TSS is reportedly mined with up to 80 naval mines in unknown locations, and Iran has warned shipping to stay away from this area. 

Iran is one of the biggest beneficiaries of the opening-up of the strait. It now has 17 tankers in laden condition with about 15 million barrels of oil aboard, per Windward and Vortexa. The U.S. naval blockade and U.S. sanctions have been lifted, allowing Iran the possibility to charge more; valued at current market rates, without a "sensitive" discount, these 17 cargoes would be worth about $1.1 billion in revenue. Eight of the tankers are out of Iran's waters, and seven more are expected to transit the Strait of Hormuz shortly. The importance of this funding strea may play a role in Tehran's decision not to enforce the "closure" of the strait that it announced on June 21 - a policy that would have led to renewed hostilities and reimposition of the U.S. blockade if it had been rigorously implemented.

Qatar is also a clear winner. It is working to restart its LNG plants, and at least seven ships in its LNG carrier fleet have crossed the Strait of Hormuz eastbound, headed for QatarGas' loading terminals at Ras Laffan. 

VLCC owners stand to benefit, too. Charterparties for Gulf loadings are getting signed again, and at very healthy day rates. On Wednesday, Marhelm Data reported a new record rate for the year: a VLCC booking from the Gulf to India at 897 Worldscale (nine times baseline). 

Reflecting positive market sentiment for the renewed availability of oil, Brent dropped five percent on Wednesday, reaching $73 per barrel - nearly back to prewar pricing, and down by about 25 percent from the levels seen in April. 

"We have the prospect of a big rush in physical supply out of the Arab Gulf. So we are in a mini glut for now as demand needs to be tempted back," Sparta Commodities analyst Neil Crosby told Reuters.