The US, Iran and Oman are closing in on a 60-day interim deal to reopen the Strait of Hormuz, but analysts warn it leaves unresolved the crucial issue of who controls shipping through the waterway.
Among the 2,339 Hormuz crossings tracked from late February until August 5, more than 54 per cent were “dark” transits with no reliable vessel-tracking signal, according to data from energy intelligence firm Kpler. Iranian-controlled routes accounted for 29 per cent of crossings. Around 9 per cent of vessels used the route approved by the UN's International Maritime Organisation. Just over 7 per cent used the Omani route.
The figures highlight the risks facing shipping, said Matthew Wright, Kpler's lead freight analyst. Nothing in the proposal amounts to a durable framework for reopening, he added.
The previous 14-point MoU agreed in July also failed to deliver a full reopening, with unresolved questions over who controlled vessel movements through the strait leaving most international operators reluctant to return.
“Everything is sort of kicked down the road for another 60 days, and it failed last time. There's nothing here that gives me confidence that this will last more than a few weeks,” he said.
Iran's Deputy Foreign Minister Kazem Gharibabadi has said it will be a “temporary route” lasting two to four months that “does not mean the full reopening” of the strait.
Malacca system
The major sticking point for oil exporters along the Gulf is the charging of tolls. Iran has demanded that ships obtain permission and pay fees to transit, which has been rejected by Gulf states and the US. Oman has floated a voluntary-contribution model similar to the Strait of Malacca's.
Unlike Iran's proposed transit fees, Malacca's co-operative system, which is managed by Indonesia, Malaysia and Singapore, does not charge vessels a mandatory per-transit fee.
Funding instead comes from voluntary contributions from governments and industry to support navigation aids and safety measures, alongside support such as patrol vessels.
Control over payment was central to Iran's position in past talks, Mr Wright said, with Tehran holding most of the leverage now.
Insurance question
The Strait of Hormuz's commercial viability will ultimately depend on whether insurers are willing to cover vessels using it. Insurers are unlikely to issue a blanket ruling that the route is “legal” or “illegal”, Dimitris Ampatzidis, a maritime risk and compliance manager at Kpler, said.
They will instead assess each voyage case by case, checking notification and authorisation, sanctions exposure and war-risk conditions.
“Shipowners may need prior approval from their hull and war-risk insurers and consultation with their P&I club,” Mr Ampatzidis said.
P&I [Protection and Indemnity] clubs provide mutual insurance cover for shipowners, including protection against third-party liabilities such as damage claims, pollution and crew-related risks.
“Additional premiums, navigational warranties or specific security conditions could also be imposed,” Mr Ampatzidis said.
Coverage will also hinge on practical details such as verified water depths, mine-clearance assurances, traffic-management and communications protocols, and credible guarantees that vessels will not be targeted while following the agreed route.
Mr Ampatzidis said there was a precedent for routing vessels outside the normal traffic separation scheme given the current security situation, and a temporary corridor could work if it was jointly run by Iran and Oman and backed by the IMO.
But he cautioned that it is too early to treat this as a permanent fix, as any lasting change should go through the IMO's formal ship routing process.
This involves review by its navigation subcommittee and approval by the maritime safety committee, rather than only being arranged bilaterally between Iran and Oman.
“A route perceived as being controlled unilaterally, applied selectively or linked to compulsory payments would be much more difficult for shipowners, charterers and insurers to accept,” Mr Ampatzidis said.
Even if a deal is reached, the wider tanker fleet is unlikely to return quickly, Mr Wright said. Vessels that transited Hormuz during the previous truce were largely operated by Gulf oil majors and risk-tolerant independents.
Much of the region's crude oil has kept moving, ferried by smaller shuttle tankers from Gulf terminals to transfer points outside the strait. Cargo is then loaded on to larger vessels for the onward voyage.
That arrangement is likely to persist even if the waterway reopens, while larger international shipowners wait for evidence that the agreement can hold.
Transits by liquefied natural gas vessels – the most expensive to charter and insure – are likely to return more cautiously.
“We saw LNG traffic picking up during the MoU [memorandum of understanding] period. I think we'll see all vessel types increase, but they will respond to the live security situation,” Mr Wright said.
The longer-term outlook will depend heavily on whether the US and Iran can sustain the political understandings behind any reopening. Iran has shown it can escalate pressure on shipping even after previous agreements, Mr Wright said. “They have the ability to wait this out,” he said.
