Persian Gulf tanker backlog clears, but fresh Iran attacks cloud shipping outlook

A huge backlog of oil tankers that got stuck inside the Persian Gulf because of the Iran war has almost cleared out — just in time for a fresh military flare up to create renewed uncertainty about how safe the region is for ships.

In late February, when US and Israeli attacked Iran, leading to Tehran’s shutdown of the Strait of Hormuz, 109 big non-Iranian crude tankers found themselves stranded in the Persian Gulf, the vast majority of them laden with cargo. More than four months into the war, just one remains. At least 50 of them exited on or after June 18, when an interim ceasefire was signed, ship-tracking data compiled by Bloomberg show.

But since that temporary pact, Tehran has attacked at least five commercial vessels in a part of the Strait of Hormuz that’s under the protection of the American military, including three oil and gas tankers this week. That’s led to the two sides launching fresh attacks on one another, forcing observable traffic in the chokepoint to return to a near standstill, and some hesitation among tanker owners about navigating the oil corridor.


“The latest developments could undermine the recovery in confidence among shipowners, delaying their return to the Persian Gulf,” said Muyu Xu, senior crude oil analyst at Kpler. “We’re no longer looking at how much backlog there is, but who is now willing to continue going in and out.”

Oil and shipping markets have been zeroed in on the rate at which crude tankers has been streaming out of Hormuz in recent weeks amid a fragile ceasefire between Iran and the US, as a sign of how soon energy-starved economies can get precious crude cargoes locked up inside the gulf.

On Thursday, the very large crude carrier Gem No. 2 was the sole big tanker still stranded in the gulf with a cargo on board, data compiled by Bloomberg show. Gem No. 2 entered the region two days before the war broke out, loaded from Saudi Arabia in March, and has never left in that time.

Another tanker with cargo that loaded during the war was Mercury Hope, which exited the gulf on Wednesday. A third, the million-barrel carrying Suezmax Stallion, has been inside the Gulf since the start of the war but has done a few transfers onto other vessels. Other than those three, there are no stranded ships remaining.

The exodus of vessels came as shipowners found various ways to extract those ships out even as Iran shut down Hormuz. Some chose to sail through in the dark to avoid scrutiny from Tehran, while others crossed after government-to-government negotiations. A few also sought the help of the US military to exit.

At the same time, entries into the gulf were limited, as shipowners would have to cross Hormuz twice, exposing their ships to more risks. Only a few risk-tolerant ones have pushed crude vessels into the gulf, and have been able to command high rates given the lack of available ships as exporters sought to ramp up production. Securing war-risk premiums to sail through the conflict zone is another issue, and shipowners must be able to find cover at the right levels in order to pass through.

Some shipowners “remain wary of two-way transits for the foreseeable future,” RBC analysts wrote in a note this week. “We do not subscribe to the ‘back-to-normal’ narrative that is ascendant in the market at the moment.”

Calls made to Gem No. 2’s Taiwan-based owner, as shown on database Equasis did not get through. Calls to Mercury Hope’s owner Cido Shipping H.K. Co. Ltd. in Hong Kong were unanswered. Stallion’s owner SG Holdings that’s registered in Nigeria did not immediately respond to an emailed request for comment.