The US and Iran have agreed a framework deal to end hostilities, with US President Donald Trump announcing the reopening of the Strait of Hormuz to commercial shipping, according to the BBC. However, ship-tracking data shows traffic levels remain low, raising questions about the speed of normalization.
Strait of Hormuz traffic remains low
According to the BBC, ship-tracking website MarineTraffic reports that only two vessels with active location trackers have exited the waterway since Sunday — a bulk carrier and a tanker. The strait has been closed to most shipping since 28 February, with only limited vessels friendly to Iran allowed passage. About 200 vessels remain stuck in the gulf, the BBC reported, citing the risk of sea mines and drone strikes.
Oil prices react to agreement
Brent crude, the global oil benchmark, was down 4.3% at $83.55 a barrel on Monday, while US-traded oil fell 4.9% to $80.74, the BBC reported. Before the conflict, Brent traded around $70 a barrel. Economist Mohamed El-Erian, quoted by the BBC, noted that while oil prices were down in May compared with April, they remain "substantially higher for the year, leaving markets with lingering questions about how quickly they can return to pre-war levels given production startup issues and other structural challenges, even when the Strait is reopened."
| Benchmark | Pre-war price | Price on Monday | Change |
|---|---|---|---|
| Brent crude | ~$70/barrel | $83.55 | +19.4% |
| US-traded oil | ~$70/barrel (est.) | $80.74 | +15.3% |
Expert concerns on shipping recovery
Neil Shearing, group chief economist at Capital Economics, cautioned to the BBC that it remains to be seen whether the deal "represents a fragile truce or a durable settlement." Capital Economics previously stated, according to the BBC, that even if ships have safe passage, "tankers are in the wrong place, oil production/refining facilities need to get up to full capacity, and questions over the cost and availability of insurance for ships traversing the Strait will remain."
Lars Jensen, chief executive of Vespucci Maritime and former Maersk director, told the BBC in May that shipping companies would likely take a "very cautious and hesitant" approach to sending vessels into the gulf. "You are likely going to see shipping lines that have vessels stuck in the Persian Gulf try to get them out, but they will be a lot more hesitant to put ships back into the Persian Gulf in case the thing turns south again," he said.
Implications for trade and logistics
About a fifth of the world's oil and LNG supplies normally flow through the Strait of Hormuz, the BBC reported. The effective halt to traffic has increased oil prices, with knock-on effects on petrol, diesel and jet fuel costs. For importers and exporters in the Middle East and beyond, the delayed reopening means continued supply chain disruptions and elevated shipping costs. Customs brokers and trade policy professionals should monitor insurance requirements and cargo routing decisions as firms remain cautious.
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