Limited Shipping Resumes Through Strait of Hormuz: 4 Million Barrels and One LNG Vessel Pass Southern Route
In a potential positive development, limited shipping traffic has resumed through the Strait of Hormuz via an alternative southern route near Oman's coast, with approximately 4 million barrels of crude oil and one LNG vessel reportedly making it through.
The New Route
With the main shipping lane blocked by the ongoing Iran-US conflict, some vessels have been rerouted to a southern passage closer to Oman's coastline:
- Alternative route: Passes near Omani coast rather than through the main central channel
- Volume: ~4 million barrels of crude oil (vs. normal 20-21 million bpd)
- LNG traffic: At least one LNG vessel has reportedly transited
- Status: Described as "seemingly" successful, with some uncertainty
Why This Matters
Supply Relief (Partial)
While 4 million barrels represents only about 20% of normal throughput, it's significantly better than zero:
- Demonstrates that some commercial shipping can still navigate the strait
- Provides modest supply relief to energy markets
- Suggests the strait is not completely sealed
Diplomatic Signal
The use of a route near Oman's coast may indicate:
- Oman's quiet cooperation in facilitating safe passage
- A potential framework for the joint management agreement being drafted
- De-escalation possibilities through regional cooperation
What's Still Missing
Despite this positive signal, major challenges remain:
- Volume gap — 16-17 million barrels per day still unable to transit
- LNG constraints — Only one LNG vessel reported, compared to normal volumes
- Toll reports — Ships may still be paying fees to pass through restricted areas
- Safety concerns — Active military conflict zone creates ongoing navigation hazards
Market Reaction
- Brent crude remains above $140/barrel despite the limited resumption
- Markets are pricing in continued significant supply disruption
- The 20% throughput rate is insufficient to relieve crisis-level pricing
Broader Implications
The fact that some shipping is getting through via the Omani route is diplomatically significant. It suggests that Oman's role as a mediator may be bearing fruit, and that the joint management framework could eventually provide a more sustainable solution to the strait's security.
However, the scale of disruption remains severe, and only a comprehensive ceasefire or security agreement would fully restore normal shipping operations.
Source: Wall Street CN, shipping reports