IS THE Strait of Hormuz open for business?

That seems to be the binary question being asked by both media outlets and the shipowners still stuck inside the Middle East Gulf, unsure whether a ceasefire is in place, or not.

The ceasefire in the Middle East appeared fragile on Wednesday, with Iran threatening to withdraw from the agreement over a wave of Israeli attacks in Lebanon.

Tehran was also reportedly halting the passage of oil tankers through the Strait of Hormuz in response to the strikes, which it said violated the terms agreed on Tuesday.

Regardless of whether the ceasefire ultimately lasts, the Strait of Hormuz remains as open, or closed as it was prior to the prospect of a 10-, or 15-point plan emerging.

Iran remains in control of the strait.

Approval of vessels that may or may not transit continues to be a decision being taken by the Islamic Revolutionary Guard Corps.

The question of who pays and who does not, remains in Iran’s gift.

For the shipowners with vessels and crew stuck inside the gulf, there is some optimism that an exit route is at least emerging as a possibility. But that very few have taken it says everything you need to know about the remaining risk factors at play.

The critical threat levels for unauthorised Strait of Hormuz transits as well as to Israel- and US- affiliated shipping attempting to transit remains unchanged.

Any shipowners seeking to move in or out are doing so only once express permission has been given and passage granted.

Even if a two-week window remains open, the strait does not get back to “normal” quickly.

Tehran’s vetting and toll booth system will constrain even the best-case scenario for vessel movement and divide trade down a geopolitical permit list of those who are and are not allowed to pass.

Even accounting for the politically unsustainable nature of that new system, the fragile two-week window barely gives an opportunity to exit those ships stuck inside. The prospect of getting empty incoming vessels loaded and out before the window shuts seems unlikely at any volume.

For now, most owners are understandably exercising restraint and awaiting a more solid basis on which to take a decision, including clarity regarding naval co-operation and guidance to shipping. Any attempt to exit before a transit agreement has been fleshed out would entail heightened risk to crew, ship and cargo.

Inevitably a few will accept the added risk, but for the moment those risks remain critical and largely unchanged by the ceasefire.

The strait remains open to some but closed to most.

Richard Meade
Editor-in-chief, Lloyd’s List