Reopened Trade Routes: Ships Pass Through Strait of Hormuz
The Strait of Hormuz and the rising cost of oil have been at the forefront of concerns in recent weeks, leading reworked supply chains and increasing costs around the world.
The current geopolitical landscape, with military conflict between the United States, Israel and Iran, triggered the closure of the Strait of Hormuz and crises across global supply chains.
This led to disruptions across maritime trade, air cargo and critical industries around the world – but this may be slowly coming to and end as Iran announces that 'non-hostile' ships can once more pass through the vital trade route.
Supply chain disruption
The Strait of Hormuz is a critical waterway between the Persian Gulf and the Gulf of Oman, providing the only sea passage from the Persian Gulf to the open ocean. As a result, it is one of the world's most strategically important choke points, particularly as it is such a vital route for liquefied natural gas and seaborne oil trade.
The passage is critical to Europe's energy security, with disruption in the area putting global supply chains at risk. Since February 2026, the chokepoint has been undergoing significant geopolitical and economic disruption, caused by military strikes by the US and Israel on Iran. Ongoing retaliation led to warnings to vessels aiming to go through the strait, with a halt in shipping traffic taking place.
Various merchant ships were attacked during the crisis, resulting in a dramatic decline in maritime transit, with more than 150 ships anchoring outside the strait. This also led to a disruption to approximately 20% of the world's daily oil supply and volumes of liquefied natural gas (LNG). Prior to the volatility, approximately 20 million barrels of oil passed through the strait on a daily basis, according to estimates from the US Energy Information Administration (EIA).
Amid fears of shortages, oil prices soared significantly. Insurance premiums for tankers rose and global prices hovered to around US$119 per barrel. Since initial strikes, oil prices have fluctuated dramatically, resulting in unstable supply chains.
Reopened routes
On Tuesday, US President Donald Trump suggested there would be an end to the conflict, with Trump aiming to make a deal with Iran. The US is proposing a month-long ceasefire in order to discuss a 15-point plan, which includes dismantling Iran's main nuclear sites and ending uranium enrichment.
Following Trump's announcement of a peace plan, oil prices fell and stocks rose. Brent crude dropped to below US$100 a barrel, falling 7%, while West Texas Intermediate was near US$87 a barrel.
Despite this, Iran has pushed back against claims of a peace negotiation, stating that there will be no peace deal that occurs on the US's terms.
"Until it is our will, nothing will go back to the way it was," states Ebrahim Zolfaghari, Spokesperson for Iran's military.
"Our first and last word has been the same from day one, and it will stay that way: someone like us will never come to terms with someone like you. Not now, not ever."
However, Iran has told the United Nations Security Council that "non-hostile" ships may travel throughout the Strait of Hormuz, as long as the vessels coordinate with Iranian authorities. This offers a reprieve for the oil market and others which have found themselves disrupted by the conflict.
A need for confidence
Following this announcement, oil prices have dropped once more, but the chokepoint is still operating at significantly low levels. Before the conflict began, the waterway had an average of 120 daily transits. MarineTraffic, a maritime intelligence firm, showed that only nine vessels had made the journey.
At present, 400 vessels are reportedly waiting outside the strait, having disrupted the global energy markets significantly. Though the strait is now open to trade, shipping companies will be taking precautions before returning to their routes.
“Even if the Strait of Hormuz were to reopen, shipping lines would only resume using the route once they are satisfied that conditions are stable and secure," explains Jill Anstey, Associate Director of Sea Freight at Baxter Freight.
"Recent experience in the Suez Canal demonstrated that carriers will avoid a passage when they perceive the operational risks to be too high, even if it remains officially open.
"As there is no still no access to ships at ports within the Strait of Hormuz including Jebel Ali, Hamad, Manama and Dammam, an alternative option would be to re-route via Jeddah on the west coast of Saudi Arabia and transiting the final leg of the journey via road."
Though the route has now opened – in conjunction with open communication with Iran – shippers need to have the confidence in the safety. Once they can gain confidence in this route, prices will see significant drops, both due to the return of oil stability and shipping costs.
This will lead to greater efficiency and cost savings, with more resilient supply chains across the world.
