The most severe supply disruption in oil market history enters its fourth month as a ceasefire framework offers the first credible prospect of reopening

The IEA has described the Hormuz closure as the largest oil supply disruption in the history of the global market, larger than the 1970s oil shocks. Over 1,550 commercial vessels remain stranded, with traffic running at roughly 5% of pre-war levels. The closure commenced on February 28 when the US and Israel launched strikes against Iran, and in retaliation the Iranian Revolutionary Guard declared the strait closed, attacked merchant ships, and laid sea mines. Since April 13, the US has imposed a counter-blockade on ships seeking to reach Iranian ports, creating a dual blockade with no historical precedent.

On May 25, the US and Iran announced a framework extending the ceasefire by 60 days while the strait is de-mined and reopened. This is the most significant diplomatic development since the conflict began. For shipping, the implications are enormous but not immediate: de-mining, insurance recalibration, and vessel clearance will take weeks. The market should plan around a gradual, uneven reopening rather than a switch being flipped.

The key question is how an eventual resolution of the conflict would impact our core shipping segments. In the short term, we would expect tanker and LPG rates to normalize from current elevated levels as trade flows revert to more efficient routes, reducing tonne-mile demand.

However, the reopening of the Strait of Hormuz would restore significant crude oil and LPG export volumes, while energy inventories would need to be rebuilt . As a result, although short-term volatility should be expected, our medium- to long-term outlook remains suppotive for both the tanker and LPG sectors.