Oil tankers remain cautious as they pass through the Strait of Hormuz after Iran declared on Friday that the sea lane was open to commercial vessels, video footage showed.
Oil Futures fell on Friday as the market interpreted Tehran’s announcement as a major breakthrough that would ease the massive disruption to global energy supplies. The American reference, Brut West Texas Intermediate stabilized 12% on Friday at $83.85 per barrel, while Brent crude futures ended the day down 9%.
But statements by Iranian officials and the president Donald Trump have caused confusion as to whether the strait is actually open or not.
Iranian Foreign Minister Seyed Abbas Araghchi initially said the strait was “completely open” for the remainder of the ceasefire with the United States and Israel. But Iranian media, aligned with the Revolutionary Guards, have issued safe passage conditions that resemble the rules imposed by Tehran for weeks.
“A false dawn”A number of tankers and cargo ships attempted to leave the strait on Friday via Iran’s designated route around Larak Island, but suddenly turned back, said Matt Smith, director of commodities research at Kpler.
“They clearly were not given permission to pass,” Smith said.
Commercial ships must follow a route designated by Tehran and coordinate with its military, a source close to Iran’s Supreme National Security Council said. Tasnim News. Ships are not allowed to pass if they or their cargoes are linked to hostile nations, according to the Tasnim report.
It’s “not clear if there’s a step change here,” said Tomer Raanan, a maritime risk analyst at Lloyd’s List Intelligence. “Iran still wants ships to transit through its territorial waters.”
Trump, meanwhile, said the US naval blockade against Iran remains in place. Tehran has threatened to close the strait if the blockade is not lifted.
All of this means the strait remains functionally closed, said Matthew Wright, senior cargo analyst at Kpler. “It’s a false dawn,” Wright said.
“Not declared safe”The world’s largest maritime association, BIMCO, on Friday advised ships to avoid the strait due to the threat of mines. The area “is not declared safe for transit at this stage,” said Jakob Larsen, BIMCO security manager.
Diplomatic overtures between the United States and Iran can calm the oil futures market, but they cannot resolve the physical disruption of energy supplies. Disruptions will only get worse each day the strait remains closed.
The last tankers and tankers, which left the Persian Gulf before the strait closed, have completed their week-long journey to their destinations in Asia, Europe and North America.
One of the latest shipments is an Iraqi crude tanker that will arrive in Long Beach, Calif., next week, said Wright, the Kpler cargo analyst.
The dominoes will now start to fall since oil is no longer coming from the Strait, Smith said. Refineries in Asia, which rely heavily on Middle Eastern oil, will have to cut production, he said. That means countries that import products like jet fuel from Asian refineries will potentially face supply shortages, he said.
“The supply crisis in Asia is bigger than anywhere else,” Wright said. “They have already significantly reduced their national stocks.”
It will take months for traffic in the strait to return to normal, Wright said. Big shipping companies will likely sit on the sidelines and watch as they move first, he said.
Correction: This story has been revised to reflect that Tomer Raanan is a maritime risk analyst at Lloyd’s List Intelligence. A previous version misspelled Raanan’s name.