The threat facing ships carrying oil through the Middle East has reached its most severe point since the war with Iran began, according to industry experts, following a fresh wave of attacks on a second major shipping route in the region.
The warning comes after a series of attacks on vessels in the Red Sea, a route some tankers had turned to as an alternative after Iran blocked the Strait of Hormuz. Iran has denied President Trump’s claim that it is engaged in talks with Washington over reopening the strait, though it acknowledged ongoing discussions with Oman aimed at securing the shipping lane.
“In terms of threat to the trade of crude, we’re at the worst period that we’ve been in since this crisis began,” said Matthew Wright, an analyst at ship-tracking firm Kpler.
Traffic through the Strait of Hormuz has collapsed dramatically, with just eight ships passing through on Sunday and 11 on Saturday, compared to more than 100 daily transits before the war began, according to Kpler. Before the conflict, roughly a fifth of the world’s oil and gas supply moved through the strait.
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A temporary peace agreement reached with the U.S. in early June had briefly allowed traffic to rebound, but the resumption of strikes between the two countries roughly a month later sharply cut flows once again. Many vessels have taken to “going dark” while crossing the strait, switching off their transponders to avoid detection.
For much of the conflict, some tankers carrying Saudi oil had rerouted through an alternative corridor in the Red Sea, running between the kingdom and northeast Africa. But a recent surge in attacks by Yemen’s Houthi forces targeting Saudi tankers using that route has added a new layer of risk.
The Iran-backed Houthi militia announced what it described as a blockade of Saudi Arabia’s Red Sea ports on July 20, and the UK Maritime Trade Operations agency has since reported multiple attacks on ships over the past week.
“Not only is the ongoing situation in the Strait of Hormuz constraining oil flows, but now a big factor that was helping to balance the market is now also under threat. It’s a problem stacked on top of a problem,” Wright said.
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Tim Wilkins, managing director of tanker industry trade body Intertanko, said the sector is facing a broadening, deteriorating and increasingly complex security environment. “We now have the high-risk area going up to Saudi Arabian waters and extending into parts of the Red Sea. So that’s having another impact on the market, on freedom of navigation as well,” he said.
According to Kpler data, 28 commodity vessels passed through the Bab el-Mandeb strait on Saturday, six of them with their transponders switched off, an indication they were trying to avoid detection. Not every ship is deterred from using the route, since the Houthi threat is specifically aimed at Saudi-linked shipping, with overall traffic sitting at roughly half of pre-attack levels.
Still, the number of ships loading crude bound for Asia through the route has fallen to about four per day, Kpler said, the lowest level recorded since the war began.
A spokesperson for global shipping giant Hapag-Lloyd said some of its vessels continue passing through the Red Sea, but that the company would monitor developments closely and adjust its network if conditions change.
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The spokesperson noted that should the Strait of Hormuz reopen, most ships could likely leave the region fairly quickly, but restoring normal cargo flows would take considerably longer, potentially three to four months, given that services have been suspended and vessels redeployed elsewhere.
Despite ongoing talks with Oman, Iran has said no deal is imminent that would restore normal traffic through the strait. Foreign Ministry spokesperson Esmaeil Baghaei said any agreement would not lift current restrictions as long as what Iran calls U.S. aggression continues.
Kpler’s Wright said that while the talks with Oman could prove productive, any lasting resolution would ultimately need direct U.S. involvement, and there’s concern the current negotiations could amount to a false start without meaningful concessions from at least one side.
Even so, oil prices dropped sharply after Trump said he would cancel planned strikes on Iran given the possibility of upcoming negotiations. Brent crude was trading 4.4% lower at $84.05 a barrel, having fallen as much as 7.3% to $81.55 earlier in the day.
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Peter Sand, chief analyst at rival ship-tracking firm Xeneta, said the renewed fighting has effectively sent the shipping industry back to square one, describing conditions as a terrible state regardless of cargo type. “The alternatives for getting cargo, whether that’s hydrocarbons or container shipping, are really not great… it is really still troubling times with no clarity and no change of fortunes within sight,” he said.
