Shipping has collapsed through vital Strait of Hormuz

Just two bulk carriers and a small container ship were observed traversing the waterway on Tuesday. All were leaving the Persian Gulf, not entering.

Traffic through the vital Strait of Hormuz shipping strait has reached a near standstill amid the war between the US, Israel, and Iran.

Just two bulk carriers and a small container ship were observed traversing the waterway on Tuesday. All were leaving the Persian Gulf, not entering.

The Strait has descended into a digital fog. Signal jamming and a widespread disabling of position-reporting transponders has hindered satellite tracking and made it more difficult to monitor traffic through the waterway. But understanding what, if anything, is moving is critical in assessing the impact of the conflict on oil, gas and other commodity markets.

The Persian Gulf nations are vital to global supplies of crude oil, fuels, natural gas and fertiliser feedstocks. And almost all of the region’s output has to pass through Hormuz, making it a choke point for a fifth of global oil and liquefied natural gas supplies, and half of the global seaborne trade of sulfur.

The effective closure of the waterway is already leading countries like Iraq to shut in production, helping to send oil prices up by 14% since the weekend and natural gas to the highest since Russia’s 2022 invasion of Ukraine. It’s also left sulfur traders scrambling for alternative supplies for the fertilizer and nickel processing industries.

Ship-tracking data compiled by Bloomberg show traffic has plummeted by well over 95%, with major crude carriers and LNG tankers avoiding the route. The few ships still moving are leaving the Gulf with location transponders turned off, a common practice in conflict zones.

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Just seven went through on Monday, tracking data show, down from more than 100 on Friday, the day before the US and Israel launched Operation Epic Fury. That fell to three on Tuesday.

The few transits that have continued have mostly been ships leaving the Persian Gulf as the conflict escalated and vessels received broadcasts warning that passage was banned.

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Because vessels can move without AIS signals until they are well away from Hormuz, automated position signals were compiled over a large area covering the Gulf of Oman, the Arabian Sea and the Red Sea to detect those that may have departed or entered the Persian Gulf.

When potential transits are identified, signal histories are examined to determine if the movement appears genuine, or is the result of spoofing — where electronic interference can falsify the apparent position of a ship.

Such activity has become widespread around Hormuz since the conflict began, with vessel signals likely caught up in wider electronic warfare.

Spoofed automated position signals showed more than 300 ships impossibly gathered at a road junction in Abu Dhabi on March 1, 2023.

Some transits may not have been detected if vessels’ transponders haven’t been switched back on. Iran-linked oil tankers often steam from the Persian Gulf without broadcasting AIS signals until they reach the Strait of Malacca about 10 days after passing Fujairah. Other ships may be adopting similar tactics and won’t show up on tracking screens for many days.

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