**Gulf Oil Exports Face Fresh Uncertainty as Tanker Traffic Stalls**
The ongoing conflict in the Persian Gulf has created significant challenges for oil exports, as tanker traffic has experienced a notable decline since the hostilities began. While many vessels that were stranded in the Gulf have now departed, the crucial tankers needed to facilitate the region's oil exports are not returning.
A temporary truce between the United States and Iran in mid-June allowed for the release of nearly 100 million barrels of crude oil that had been trapped within the Gulf. This development led to a marked increase in outbound tanker traffic through the Strait of Hormuz, with 242 vessels crossing the waterway in the week leading up to June 28. This figure represents a substantial rise from the approximately 60 vessels that had crossed weekly in the months prior. However, it still falls significantly short of the pre-conflict average of over 700 crossings per week.
During the same week, crude tanker crossings increased to 57, compared to a wartime average of just 15. Despite this uptick, the movement of vessels has been heavily skewed. Of the 242 vessels that crossed, 157 were non-Iranian ships traveling eastward and leaving the Gulf. This disparity indicates that while shipowners are willing to move loaded vessels out of the region, they remain hesitant to send empty tankers back to the oil export terminals of Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, and Iraq.
Prior to the conflict, the Gulf housed tankers with a total crude-carrying capacity of around 150 million barrels, primarily consisting of empty vessels waiting to load. However, this capacity has now dwindled to below 100 million barrels, with a significantly reduced number of available empty ships. Although the backlog of stranded cargoes is beginning to clear, the lack of returning tankers poses a challenge for Gulf oil producers aiming to restore regular export levels and production.
Recent attacks on commercial vessels have further complicated the situation. On July 8, at least four tankers turned back after maritime authorities elevated the threat level for ships crossing the Strait of Hormuz to "severe." Among those vessels were three empty LNG carriers from QatarEnergy heading towards the Ras Laffan export terminal, as well as the Indian-flagged Very Large Crude Carrier (VLCC) Lila Vadinar, which was transporting two million barrels of Kuwaiti crude.
By July 9, tanker traffic through Hormuz had nearly ground to a halt, with only two tankers recorded crossing during the early hours of the day. Daily traffic had averaged around 40 ships in the previous two weeks, still far below the pre-conflict average of 125 to 140 sailings. Some vessels have opted to switch off their Automatic Identification System (AIS) transmitters, suggesting that the actual number of crossings may be higher. Nonetheless, shipping data and the decision of several vessels to reverse course indicate a significant decline in confidence among shipowners.
One vessel affected by the recent attacks was the Qatari LNG tanker Al Rekayyat, which remained stranded near Oman after a projectile struck its engine room, causing a fire. Fortunately, the cargo was reported to be secure, and no injuries or environmental damage were recorded. However, these incidents have prompted some war-risk insurers to advise companies to pause voyages, while others are reevaluating their coverage conditions. Insurance assessments are now being conducted on a voyage-by-voyage basis, adding another layer of uncertainty for shipowners contemplating a return to the region.
For shipowners, entering the Gulf involves accepting risks on two fronts: every vessel must navigate into the Gulf to collect a cargo and then make the return journey through Hormuz. Even the elevated freight rates available in the region are proving insufficient to offset the potential dangers posed to crews, vessels, and cargoes.
The Strait of Hormuz is a critical artery for global oil supplies, accounting for about one-fifth of the world's oil transport before the conflict began on February 28. As such, the recovery of tanker traffic cannot be solely measured by the number of vessels that have managed to leave the Gulf. A return to normalcy will depend on the significant resumption of empty tankers sailing back into the Gulf.
Until security conditions stabilize, the region may continue to see a decrease in vessel traffic without regaining the shipping capacity necessary to restore its vital oil trade. The situation remains fluid, and the future of Gulf oil exports hangs in the balance as stakeholders navigate the complexities of maritime security and geopolitical tensions.