Strait of Hormuz reopens: But can ships’ safety be assured?

Despite a preliminary deal between the US and Iran to end a war that closed the Strait of Hormuz, marine traffic has not significantly resumed. Shipping operators and insurers are adopting a wait-and-see approach due to lingering concerns about safety and stability. Before the conflict, 120-140 ships transited daily, but only seven have passed since the agreement. Key challenges include the potential for mines, the risk of renewed hostilities, and the requirement for coordination with Iran's IRGC for passage. Shipping companies need to observe a sustained period of no incidents before deeming the strait safe for normal operations, a process that could take months.

Indian sailors, like Captain Raman Kapoor and his 24 crew members, experienced significant trauma after being trapped for 75 days north of the Strait of Hormuz during a conflict between the United States and Iran. Their tanker became stuck in the war zone while loading oil at an Iraqi port, with missiles flying overhead. Despite the Strait of Hormuz nearing reopening, the sailors are still dealing with the psychological impact of being caught in the conflict. They described feeling scared, helpless, and trapped during their ordeal.

Despite an announcement regarding the "opening" of the Strait of Hormuz, ship traffic has not resumed to pre-conflict levels due to significant obstacles. Experts cite security concerns, the threat of mines, and ongoing tolls as primary deterrents. Since late February, Iran has effectively blocked the strait, firing on ships and leading to a US naval blockade which, though announced as removed, remains in place. Ship-tracking data shows hundreds of vessels waiting in the Gulf. The presence of suspected mines, which could take months to clear, poses a substantial risk, making captains hesitant to be the first to transit.

A tentative agreement to end the war in Iran and reopen the Strait of Hormuz has been reached, but oil flow will not immediately resume. Hundreds of ships are trapped in the Persian Gulf, and oil producers need time to restart operations. Analysts predict it will take weeks or even months for oil to fully flow again, with challenges including mine clearance, ship transit, and production ramp-up. The deal's durability is uncertain, and details regarding Iran's potential collection of fees remain unclear, posing sanctions risks for shippers. Economists anticipate inflation will remain elevated for an extended period, even with the strait's reopening.