- Oil and gas tankers are avoiding the Strait of Hormuz after US and Israeli strikes on Iran
- Some vessels turned back or paused voyages amid unconfirmed Iranian transit ban broadcasts
- US warned ships to stay 30 nautical miles away from its military assets in the Middle East
Oil and gas tankers are increasingly avoiding the Hormuz shipping strait that links the oil-rich Persian Gulf to the open seas after the US and Israel bombed Iran, with a large number of vessels holding outside of the waterway while some already transiting have turned back.
Ships reported hearing a radio broadcast purporting to come from the Iranian navy announcing that transit through the Strait of Hormuz was banned, and while there hasn't been any official communication from Iran on the status of the waterway, most shipowners are taking a cautious approach. The US earlier issued a warning to shipping in the Middle East that vessels in the region should stay 30 nautical miles away from its military assets.
Tracking data shows some tankers turning around, and at least one shipowner decided not to send its vessel into the strait as a result of the broadcast, according to a person familiar with the matter. Some vessels continue to pass through though - seven ships were seen exiting Hormuz while six were entering after the warnings had been issued, according to vessel tracking data compiled by Bloomberg.
The sharply reduced traffic offers the first signs of disruption to commodity markets from the US decision to attack Iran, though it's unclear how long it will last. The Strait of Hormuz is one of the most important focal points at times of tension with Iran, because a fifth of the world's seaborne oil and liquefied natural gas goes through it each day. Tehran has in the past threatened to block it, but has never fully closed the waterway.
Read: Khamenei Dead Or Alive? Israeli Claim Meets Iran's "As Far As I Know" Reply
Traffic had already slowed significantly in the wake of the attacks, and Bloomberg reported earlier that tankers were piling up both inside and outside of the entrance into the strait.
Japanese giant Nippon Yusen KK earlier told its fleet not to navigate Hormuz, while Greece told its vast merchant fleet to reassess passage, according to a circular seen by Bloomberg. One owner had said they interpreted the US advisory as effectively closing the waterway.
Several shipowners later received a broadcast instructing ships not to proceed through the strait and that it was "banned for all ships."
Oil futures markets are closed on Saturday and Sunday, giving reduced insight into how traders are really pricing risk in the wake of the attacks. However, a retail trading product, run by IG Group Ltd., was pricing West Texas Intermediate as high as $75.33 at one point, a gain of as much as 12% from Friday's close.
Read: Dubai's Burj Khalifa Hit? Video Shows Explosion Near World's Tallest Building
Traders are also watching for wider disruptions, including the impact of Iranian retaliatory strikes and whether any ports are being disrupted.
Oil tankers are coming to a stop on both sides of Hormuz, with three vessels halting journeys out of the Persian Gulf and a small flotilla of at least eight tankers building up over the past two weeks outside the Gulf of Oman. Others are aborting their voyages part way through the waterway.
At least three gas tankers going to or from Qatar have paused voyages to avoid the waterway, according to ship-tracking data. Qatar is the world's second-largest LNG exporter, making up 20% of supply last year, and the country's shipments must pass through the Strait to reach buyers in Asia and Europe.
Some shipowners were considering canceling already-fixed voyages into the Middle East, said shipbrokers, citing a war clause that gives them the right to do so should hostilities break out between a list of countries, including the US and Iran. This could tighten the supply of vessels in the region, further supporting high freight rates that have recently soared to the highest level in years.
Read: Explosion At The Palm In Dubai, Smoke Seen Rising From Building
The very large crude carrier KHK Empress was part-loaded with Omani crude and heading through the Strait of Hormuz for Basra when it made a U-turn and headed back toward the Arabian Sea. The vessel's destination was changed from Basra to New Mangalore in India, where it's expected to arrive on Monday.
In the Persian Gulf, the oil tanker Eagle Veracruz, heading for China with 2 million barrels of Saudi crude, has come to a halt at the western approach to the Strait of Hormuz, where it has been joined by the Front Beauly, which is carrying a similar amount of Iraqi and Emirati crude. The Suezmax tanker Front Shanghai, carrying about 1 million barrels of Iraqi crude to Rotterdam has also stopped off Sharjah, the tracking data show.
A build-up in vessels halting voyages toward Hormuz from the east had been going on for most of the week, tanker tracking data compiled by Bloomberg show.
The supertanker Mitake, heading for Ras Tanura in Saudi Arabia, came to a virtual halt east of Oman shortly after news of the US attack broke earlier this morning. It joined a growing flotilla of idling tankers in the waters outside the Gulf Oman, which leads to the Strait of Hormuz and the Persian Gulf.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
