The Strait of Hormuz: Geography, Oil Flows, and What a Disruption Actually Means
- Vivek Seth
- Jun 18
- 24 min read
Most coverage of the Strait of Hormuz describes it as a chokepoint and moves on. What it rarely explains is why the strait is structurally irreplaceable, what happens to a loaded tanker whose route is suddenly blocked, or why the risk to LNG exporters is categorically worse than the risk to crude oil exporters during any disruption.
I managed vessel operations in this region at ADNOC. VLCCs transited the strait as a matter of operational routine. Insurance management, charterparty war risk clauses, and traffic separation scheme compliance were not abstractions. This article draws directly on that operational experience.
Who this guide is for: Maritime professionals and tanker operators, energy analysts and commodity traders, shipping finance professionals, cargo owners and charterers with Gulf exposure, and anyone following the 2026 situation who needs a grounded maritime commercial perspective.
Quick Answer: What is the Strait of Hormuz? The Strait of Hormuz is a narrow waterway between Iran and Oman connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. It is the world's most important oil transit chokepoint. Approximately 20 million barrels of oil and petroleum products pass through it daily, representing roughly one-quarter of global seaborne oil trade. All Qatari LNG, approximately one-fifth of global LNG trade, also transits the Strait, with no pipeline alternative.
Table of Contents
What Is the Strait of Hormuz: Geography and Physical Constraints
How Much Oil and LNG Transits the Strait: The Numbers That Matter
Who Depends on the Strait: Exporters, Importers, and the Spare Capacity Problem
How Vessels Actually Transit the Strait: The Traffic Separation Scheme
Historical Context: The 1987-1988 Tanker War and What It Taught
What Is the Strait of Hormuz: Geography and Physical Constraints
The Strait of Hormuz is a narrow waterway connecting the Persian Gulf to the Gulf of Oman and, beyond that, to the Arabian Sea and the Indian Ocean. Iran occupies its northern shore. To the south, the strait is bordered by Oman's Musandam Peninsula (an exclave of Oman separated from the main body of that country by UAE territory) and by UAE coastal areas.
The strait's total navigable length is approximately 90 nautical miles. At its narrowest navigable point, the usable channel is approximately 21 nautical miles (39 km) wide. But the navigable shipping channel within that width is considerably narrower. Vessels transit under a mandatory Traffic Separation Scheme that constrains them to lanes of approximately 2 nautical miles each.
This is what makes the strait strategically singular: it is narrow enough that a small number of actors can affect the passage of all commercial traffic, yet wide and deep enough that a complete physical sealing would require sustained force rather than a simple obstacle.
Why There Is No Alternative Sea Route
The Persian Gulf is an enclosed body of water. Every oil and gas producing country on its shores (Saudi Arabia, the UAE, Kuwait, Qatar, Iraq, Bahrain, and Iran) has its primary marine export infrastructure on Gulf coasts. Loading terminals, marine berths, pipeline connections, and offshore loading buoys are all on the Gulf side of Hormuz.
The only sea passage from the Persian Gulf to the open ocean is through the Strait of Hormuz. This is not comparable to other maritime chokepoints. The Suez Canal can be bypassed via the Cape of Good Hope. The Panama Canal can be bypassed via Cape Horn. The Strait of Malacca can be bypassed through the Lombok or Sunda Straits. The Strait of Hormuz has no maritime bypass. A vessel loaded at Ras Tanura with crude oil destined for Shanghai has exactly one way out of the Gulf.
The Territorial Waters Complexity
The shipping lanes in the Strait of Hormuz are located primarily in Omani territorial waters through the Musandam Peninsula, and partially in Iranian territorial waters. Under Article 38 of the United Nations Convention on the Law of the Sea (UNCLOS), all ships and aircraft (including warships) have the right of transit passage through international straits used for international navigation. This right exists regardless of the coastal state's preferences. Coastal states cannot suspend transit passage rights under UNCLOS.
The distinction between the legal right of transit passage and the practical ability to exercise it is critical in 2026. A vessel has the legal right to transit under UNCLOS. Whether it can do so safely and insured is a different question entirely.
How Much Oil and LNG Transits the Strait: The Numbers That Matter
Crude Oil and Petroleum Products
Per EIA analysis based on Vortexa tanker tracking data: flows through the Strait of Hormuz in 2024 and the first quarter of 2025 made up more than one-quarter of total global seaborne oil trade and about one-fifth of global oil and petroleum product consumption. Per the IEA, in 2025 nearly 15 million barrels per day of crude oil passed through the strait, approximately 34% of global crude oil trade. Saudi Arabia is the dominant Hormuz crude exporter: in 2024, Saudi crude and condensate exports accounted for approximately 38% of total Hormuz crude flows at 5.5 million barrels per day per EIA data.
LNG Flows: Qatar's Exposure
Around one-fifth of global LNG trade transited the Strait of Hormuz in 2024 and 2025, primarily from Qatar, per IEA data. More specifically: approximately 93% of Qatar's LNG exports and 96% of the UAE's LNG exports transit the Strait. Qatar is the world's largest LNG exporter. Its entire production infrastructure is at Ras Laffan, on the Qatari coast of the Persian Gulf. There is no LNG pipeline alternative for Qatar.
Commodity | Daily Volume (2024-2025) | Share of Global Trade | Primary Exporters |
Crude oil | ~15 mb/d | ~34% of global crude trade | Saudi Arabia (38% of Hormuz crude), Iraq, UAE, Kuwait |
Petroleum products | ~5 mb/d | ~20% of global product trade | UAE, Saudi Arabia, Kuwait |
LNG | ~1/5 of global LNG trade | ~20% of global LNG trade | Qatar (dominant), UAE |
Total oil and products | ~20 mb/d | ~25% of seaborne oil trade | Multiple Gulf states |
Who Depends on the Strait: Exporters, Importers, and the Spare Capacity Problem
The importing side of Hormuz is dominated by Asia. China, India, and Japan are the three largest individual importers of Persian Gulf crude. South Korea, Taiwan, and Singapore also have substantial Hormuz exposure. European refineries receive a smaller share. The IEA notes that most Hormuz exports head to Asian countries, with China, India, and Japan as the main importers. Disruption to Hormuz affects Asian energy costs and industrial production more directly than any other region.
The Spare Production Capacity Problem
The IEA raises the most important and least-discussed strategic dimension of a Hormuz disruption: the spare production capacity effect.
Most of the world's spare crude oil production capacity (the additional barrels that can be brought online relatively quickly to offset supply disruptions elsewhere) is held by Saudi Arabia. Saudi Arabia also exports its oil primarily through the Strait of Hormuz. If Hormuz is disrupted, the spare production capacity that the global oil market would normally rely upon to offset the supply loss is itself behind the same blockage.
This creates a structural amplification that goes beyond the barrels-per-day lost through Hormuz. It removes the primary safety valve that markets use to manage supply shocks. Brent crude rising from $69 to $74 per barrel on June 12-13, 2025 following regional tensions (a single day's increase of roughly 7%) demonstrates how sensitive markets are to even the perception of Hormuz risk, without any actual supply reduction.
How Vessels Actually Transit the Strait: The Traffic Separation Scheme
The IMO Traffic Separation Scheme
The Strait of Hormuz operates under an IMO-designated Traffic Separation Scheme (TSS). The TSS establishes a mandatory routing arrangement: an inbound lane of approximately 2 nautical miles width (for vessels entering the Persian Gulf), a separation zone of approximately 2 nautical miles, and an outbound lane of approximately 2 nautical miles (for vessels leaving the Persian Gulf). All merchant vessels are required to use the appropriate lane under SOLAS Chapter V (Safety of Navigation). The total width of the TSS is approximately 6 nautical miles, within the approximately 21-nautical-mile-wide navigable channel.
The remaining width between the TSS and the Iranian and Omani coastal waters contains shallow areas, islands, and navigational hazards that restrict large vessel movement to the TSS lanes. The effective funnel is significantly narrower than the strait's geographic width suggests.
VLCC Transit Realities
A fully loaded VLCC (typically 200,000-320,000 DWT, carrying 2-3 million barrels of crude oil) transiting inbound must navigate the 2-nautical-mile inbound lane at reduced speed. At 8-10 knots in the lane, the transit from the Musandam approach to open Persian Gulf waters takes approximately 2-3 hours. A VLCC's draft when fully loaded typically reaches 20-22 meters, requiring careful management of under-keel clearance. The vessel's length (typically 300-340 meters) means it occupies a substantial portion of the lane width during turns.
At ADNOC, Hormuz transit was a scheduled, well-rehearsed operation. VTMS coordination, speed reduction at defined waypoints, AIS compliance, and watch officer briefings on current traffic density were standard pre-transit preparations. Under normal conditions, the transit is operationally manageable. What changes during a crisis is not the physical operation but the insurance and commercial framework around it.
VTMS and AIS Requirements
Vessels transiting the Strait are required to maintain AIS (Automatic Identification System) transponder operation and comply with Vessel Traffic Management System (VTMS) requirements coordinated between Oman Maritime Administration and other authorities. The VTMS provides traffic management information and navigational advisories to vessels in the strait. AIS data from the strait is tracked by commercial analytics firms including Kpler and Vortexa, whose vessel movement data forms the basis for most of the traffic statistics cited in media coverage of the 2026 disruption.
During periods of heightened tension, some vessels choose to disable their AIS transponders to reduce targeting risk. This practice (while understandable from a security perspective) increases collision risk from the loss of vessel visibility to nearby traffic.
The 2026 Disruption: What Happened to Vessel Traffic
The following is a factual account of the commercial and shipping impact of the 2026 regional conflict on Hormuz transit. No commentary on the causes or conduct of the conflict is intended.
The Scale of the Traffic Reduction
Before the conflict escalation in early 2026, approximately 3,000 vessels transited the Strait of Hormuz each month, according to Lloyd's List Intelligence data cited by CNN. Oil tankers in that traffic accounted for approximately 15 million barrels per day of crude and petroleum product exports, per Kpler analytics data, representing roughly one-fifth of global oil trade.
By April 2026, Kpler data showed recorded transits of just 191 vessels for the entire month, a reduction of approximately 94% from pre-disruption levels. Kpler's maritime risk and compliance manager Dimitris Ampatzidis described the disruption as "both rapid and unprecedented." The Britannica entry, updated in June 2026, confirms the traffic reduction and notes that Iran's naval capability allowed significant influence over strait conditions during the conflict.
Why Traffic Fell Beyond the Physical Conflict
The traffic collapse was not solely the product of vessels being physically prevented from transit. Three commercial mechanisms drove the withdrawal simultaneously.
First, war risk insurance underwriters suspended or significantly restricted coverage for vessels transiting the Gulf. Without valid war risk insurance, a vessel's H&M policy and P&I cover were both compromised, making transit commercially indefensible regardless of physical access.
Second, major charterers suspended Gulf voyage instructions to their managed or owned vessels pending coverage restoration, often citing force majeure under their charterparties as the basis for not requiring transit.
Third, vessel operators made independent decisions to avoid the Gulf entirely while monitoring the situation, weighing the commercial cost of delays and force majeure claims against the potential loss of a vessel and its crew without insurance coverage.
Bypass Alternatives: What Pipelines Can and Cannot Do
The 2026 disruption accelerated interest in bypass alternatives that had been discussed for decades. The analysis from Hormuz Strait Monitor (April 2026) provides the most quantitative public framework: normal Hormuz throughput is approximately 20 million barrels per day; all known bypass alternatives combined can handle at most approximately 10 million barrels per day at maximum theoretical utilization. The structural gap of approximately 10 million barrels per day has no short-term solution.
Saudi Arabia's East-West Pipeline (Petroline)
The Petroline runs approximately 1,200km from Abqaiq on the Saudi Arabian Gulf coast westward to Yanbu on the Red Sea, bypassing the Strait entirely. Saudi Aramco raised its capacity to 7 million barrels per day in March 2025, described by analysts as prescient timing. During the 2026 disruption, Saudi Arabia pivoted crude exports toward Yanbu. The pipeline was targeted in strikes, resulting in a temporary loss of approximately 700,000 b/d, but subsequently resumed full capacity per Al Majalla's April 2026 reporting. The Yanbu terminal is now reportedly close to its loading berth capacity, meaning the bottleneck has shifted from pipeline throughput to terminal handling.
Two critical limitations: Petroline handles Saudi crude only. It provides no bypass for Iraq, Kuwait, UAE, Qatar, or Iranian exports. And even at full capacity, it covers only approximately 35% of normal Hormuz throughput.
UAE's ADCOP Pipeline
The Abu Dhabi Crude Oil Pipeline (ADCOP, also called the Habshan-Fujairah line) runs approximately 360km from Abu Dhabi's interior to the port of Fujairah on the Gulf of Oman, entirely bypassing the Strait. Capacity is approximately 1.5 million barrels per day, less than 8% of normal Hormuz throughput at full utilization. The pipeline was built at a cost of approximately $3.3 billion specifically as a Hormuz contingency. Fujairah has become a major oil storage and bunkering hub. But its total contribution to a bypass scenario is limited.
Other Pipeline Alternatives
The Kirkuk-Ceyhan pipeline (Iraq to Turkey's Mediterranean coast) has a design capacity of approximately 900,000 b/d but has been chronically disrupted by Baghdad-Kurdistan disputes. It was reactivated following the 2026 disruption with initial flows of approximately 250,000 b/d. Iran's Jask terminal, under development on the Gulf of Oman coast, is intended to allow Iranian exports without Hormuz transit but is not yet operational at scale. Various pipeline proposals (Iraq-Jordan, Iraq-Saudi, Netanyahu's March 2026 proposal for Gulf-to-Israel transit corridors) remain in early or speculative stages.
Bypass Route | Type | Capacity | Coverage | Key Limitation |
East-West Pipeline (Petroline) | Pipeline | ~5-7 mb/d | Saudi crude only | Yanbu loading limit; Saudi only |
ADCOP (Habshan-Fujairah) | Pipeline | ~1.5 mb/d | UAE crude only | 8% of Hormuz throughput; UAE only |
Kirkuk-Ceyhan (Iraq-Turkey) | Pipeline | ~900K b/d design | Iraqi crude | Political disputes; 250K b/d current |
Cape of Good Hope maritime reroute | Maritime | Unlimited | All tankers and bulk | +10-15 days, +$300-800K per voyage |
SUMED pipeline (Egypt) | Pipeline | ~2.5 mb/d | If oil reaches Red Sea first | Downstream only; not a Gulf bypass |
All alternatives combined | Mixed | ~10 mb/d max | Crude oil only | 10 mb/d gap; NO LNG alternative |
The LNG Structural Gap: Why Qatar Has No Alternative
Qatar's Unique Vulnerability
Every bypass pipeline described above carries crude oil or petroleum products. Not one of them can transport liquefied natural gas. LNG must be maintained at approximately -162 degrees Celsius during transport and shipped in purpose-built insulated LNG carriers under carefully managed pressure and temperature conditions. There is no commercially deployed LNG pipeline technology operating over regional distances comparable to what a crude oil pipeline can do.
Qatar's entire LNG production infrastructure is at Ras Laffan on Qatar's Persian Gulf coast. All of Qatar's LNG must exit the Persian Gulf through the Strait of Hormuz by ship. There is no alternative of any kind. Not a pipeline that could be built in a year, not a smaller waterway bypass, not a rerouting through another terminal. Ras Laffan's LNG is in the Gulf. The Gulf exits only through Hormuz.
The Scale of Qatar's LNG Exposure
Qatar exports approximately 77 million tonnes of LNG per year. The IEA reports approximately 93% of Qatar's LNG exports transit the Strait of Hormuz. QatarEnergy declared force majeure on LNG deliveries during the 2026 disruption. Europe receives approximately 12-14% of its LNG from Qatar under both spot and long-term contracts. South Asian power markets, particularly Pakistan and India, depend on Qatari LNG for peak power generation. East Asian buyers in Japan, South Korea, and Taiwan hold long-term contracts with QatarEnergy. All of it transits Hormuz.
Why the LNG Gap Cannot Be Quickly Filled
Unlike crude oil, where IEA member states maintain strategic petroleum reserves and where non-Gulf suppliers (US, Russia, West Africa) can redirect additional cargoes to affected markets, LNG supply cannot be quickly substituted. LNG infrastructure (liquefaction plants, regasification terminals, carriers) is purpose-built for specific trade routes over decades-long investment cycles. A European import terminal configured for Qatari LNG characteristics cannot simply switch to US Gulf Coast shale LNG without adjustments. Spot LNG markets are shallower than crude markets. A sustained loss of 20% of global LNG trade has no short-term pathway to replacement.
Carra Globe's supply chain analysis (May 2026) noted that Europe gets 12-14% of its LNG from Qatar, all of which previously transited Hormuz, and that QatarEnergy's force majeure declaration directly affects European energy supplies. The asymmetry is stark: crude oil exporters have partial bypasses. LNG exporters have none.
War Risk Insurance and What a Disruption Means Commercially
The news coverage of the 2026 traffic collapse consistently references insurance withdrawal as a driver. Very little explains how that mechanism works. This section fills that gap.
What War Risk Insurance Covers
Standard marine insurance (Hull and Machinery (H&M) coverage and Protection and Indemnity (P&I)) excludes losses arising from war, acts of war, hostile acts, capture, seizure, and related perils. A separate war risk insurance policy covers these excluded perils. The war risk market is centered at Lloyd's of London, where specialist war risk underwriters assess and price exposure for individual voyages or vessels in elevated-risk areas.
War risk coverage typically pays for the total loss of a vessel from a war peril, damage from military or hostile attack, and related expenses. Some war risk policies cover the additional cost of rerouting when a named route becomes unavailable due to hostilities.
War List Ports and the JWC
The Joint War Committee (JWC), a body of Lloyd's of London marine underwriters, publishes and maintains a list of areas designated as elevated-risk for hull war, strikes, terrorism and related perils. When an area or port is added to the JWC list, standard H&M policies automatically exclude coverage for vessels visiting that area unless specific additional war risk premium is paid and the insurer is notified.
During the 2026 disruption, the Persian Gulf was effectively treated as a premium-rated war risk area by the market. War risk additional premiums (which are quoted as a percentage of the vessel's insured value per voyage) reportedly spiked to levels that made individual voyages commercially unviable. VLCC freight rates, as tracked by the Baltic Dirty Tanker Index, reached reported peaks of $800,000 per day at peak disruption per one market analysis, reflecting both the shortage of available vessels and the embedded war risk premium costs.
The Commercial Cascade
When war risk insurance becomes unavailable or commercially prohibitive, the consequences are immediate and cascade across every commercial relationship surrounding the voyage:
The vessel owner cannot transit without war risk coverage without voiding their H&M policy.
The P&I club must be notified of any voyage into a war risk area, and club rules may impose conditions or exclusions on cover during that transit.
The cargo insurer refuses coverage for goods being transported by a vessel without valid war risk insurance.
The bank holding the ship mortgage may have a loan covenant requiring the owner to maintain full insurance coverage and to avoid war risk areas where coverage cannot be maintained.
The charterer, unable to require the owner to transit without coverage, may claim the vessel is off-hire for the duration of the blockage.
The result is a commercial ecosystem that seizes up well before the first shell is fired at a vessel. Insurance withdrawal is not a consequence of physical danger, it is a leading indicator of commercial paralysis.
For a deeper treatment of how P&I coverage intersects with war and sanctions risk, see our guide to [P&I insurance](/blog/pi-insurance-protection-indemnity).
What Happens to a Loaded Tanker When the Route Is Blocked
The Decision Tree
A VLCC that has completed loading at Ras Tanura and is sailing toward Hormuz when a crisis escalation begins faces a compressed decision sequence.
The master and commercial manager first assess war risk coverage status. If coverage is in place and has not been suspended by the underwriter, and if the master's judgment is that transit risk is within acceptable parameters, transit may proceed. If coverage has been suspended or the premium has made it commercially unviable, transit cannot proceed without exposing the owner to potential total loss without insurance recovery.
If transit cannot proceed, the vessel has several options. It can anchor in Saudi or UAE territorial waters to await a change in the situation, burning fuel, incurring crew costs, and running against the charterer's laycan and delivery obligations. It can return to the loading terminal if storage capacity is available, which requires negotiating off-hire conditions with the charterer and, often, additional fees at the terminal. It can attempt to wait at a Gulf of Oman anchorage if it has already partially transited.
For a vessel mid-strait when an escalation occurs, the decision is more urgent. The master must decide immediately whether to accelerate through to the Gulf of Oman or to reverse and return. Both options carry operational and security risk. Both may also trigger insurance notifications.
Charterparty Implications
Whether a Hormuz blockage constitutes force majeure under a standard tanker charterparty depends on the specific form. Standard tanker charterparty forms (BPVOY4, Shellvoy6, Asbatankvoy) include war risk clauses specifying the parties' rights when a named area becomes subject to war risk. In most forms, if the vessel is ordered to transit a war risk area, the owner has the right to require the charterer to pay the applicable war risk additional premium. If the charterparty's war risk clause prevents the vessel from entering a designated war risk area, the owner may decline transit without being considered in breach.
The question of who bears the commercial cost of a Hormuz disruption, the owner (for vessel losses, idle time costs) or the charterer (for non-delivery of cargo, demurrage against the cargo receiver), is determined clause by clause in the charterparty. This is why the war risk clauses in tanker charterparties are among the most heavily negotiated provisions in tanker practice, and why they matter acutely in 2026.
Historical Context: The 1987-1988 Tanker War and What It Taught
The 2026 situation is not the first time Hormuz transit has been severely disrupted. The most relevant precedent is the Tanker War of 1987-1988.
What the Tanker War Was
During the Iran-Iraq War (1980-1988), both Iran and Iraq attacked oil tankers to undermine each other's oil revenues. Iranian attacks on tankers in the Gulf significantly disrupted commercial shipping. Kuwait, whose tankers were being targeted, could not obtain adequate protection under its own flag and requested US intervention. In 1987, the US agreed to reflag 11 Kuwaiti tankers under the American flag, entitling them to US Navy escort through the Gulf. Operation Earnest Will, which ran from July 1987 to September 1988, escorted 259 convoys through the Gulf (the largest US Navy convoy operation since World War II.
The Commercial Lessons
Operation Earnest Will demonstrated several things that remain relevant:
Naval escort can keep a strategic waterway functionally open even during active military conflict in the surrounding region. The straits were not physically blocked during the Tanker War despite sustained military activity.
Insurance markets can continue to operate) at elevated premiums, when government protection credibly reduces the risk to vessels. Lloyd's war risk underwriters continued to provide coverage for escorted tankers during Operation Earnest Will, though at higher premiums than peacetime.
The legal mechanism of reflagging (changing a vessel's flag state to access the naval protection of a specific country's fleet) has been used before. It requires political agreement between the flag state, the vessel owner, and the protecting naval force, but it is a documented precedent for how international maritime commerce can be protected when a transit area is under threat.
Individual incidents still occurred despite the escort programme. The USS Stark was struck by Iraqi missiles in May 1987. The USS Vincennes accidentally shot down Iran Air Flight 655 in July 1988. The presence of naval protection reduced but did not eliminate risk. The commercial calculus of transit risk versus commercial penalty for non-delivery remained a live calculation throughout the period.
For further context on how the shadow fleet and sanctions-related vessels operate in current Gulf conditions, see our analysis of the [shadow tanker fleet in 2026](/blog/shadow-tanker-fleet-2026).
Frequently Asked Questions
What is the Strait of Hormuz?
The Strait of Hormuz is a narrow waterway between Iran and Oman connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. It is the only sea passage from the Persian Gulf to the open ocean, and is the world's most important oil transit chokepoint. Approximately 20 million barrels of oil and petroleum products pass through it daily, representing roughly one-quarter of global seaborne oil trade.
How much oil passes through the Strait of Hormuz?
Per EIA analysis based on Vortexa tanker tracking: Hormuz flows in 2024 and early 2025 made up more than one-quarter of total global seaborne oil trade and about one-fifth of global oil and petroleum product consumption. The IEA reports nearly 15 million barrels per day of crude oil transited in 2025 (approximately 34% of global crude oil trade. Saudi Arabia accounts for approximately 38% of total Hormuz crude flows at 5.5 million b/d.
Why is the Strait of Hormuz so important?
The strait is the only sea exit from an enclosed sea) the Persian Gulf (that contains a substantial share of global oil and LNG production and export infrastructure. There is no maritime bypass. Unlike other major chokepoints, vessels cannot reroute by sea if Hormuz is blocked. Combined with the fact that most global spare crude production capacity also sits behind the same passage, a Hormuz disruption affects global energy supply in ways that no other chokepoint can replicate.
Has the Strait of Hormuz ever been closed?
It has never been formally closed in the legal sense) transit passage rights under UNCLOS remain in force. However, it has been severely disrupted. During the Iran-Iraq War in the 1980s (the Tanker War), Iranian attacks on commercial vessels significantly reduced traffic until US Navy convoys restored functional transit. In 2026, a regional military conflict reduced tanker traffic to approximately 6% of normal levels by April 2026 per Kpler data, though without a complete physical blockade.
Who controls the Strait of Hormuz?
No single country controls the strait. The shipping lanes run primarily through Omani territorial waters (via the Musandam Peninsula) and partially through Iranian territorial waters. Under UNCLOS, all states have transit passage rights through international straits used for international navigation. The US Fifth Fleet, based in Bahrain, provides naval presence in the region. Oman's maritime administration coordinates vessel traffic management. Iran's military has the capability to exert significant influence over transit conditions, as events have demonstrated.
What happens to oil prices if the Strait of Hormuz is blocked?
Even partial disruptions cause immediate price increases. Per EIA data, a tension escalation on June 12, 2025 caused Brent crude to rise from $69 to $74 per barrel in a single day. The 2026 disruption pushed oil prices above $100 per barrel per contemporaneous reporting. A sustained full closure (which the bypass pipeline infrastructure cannot compensate for) would remove one-quarter of global seaborne oil supply from the market, with no available replacement at that scale.
What are the alternatives if the Strait of Hormuz is blocked?
Pipeline alternatives can collectively handle approximately 10 million barrels per day at maximum utilization, roughly half of normal Hormuz throughput. Saudi Arabia's East-West Petroline handles approximately 5-7 mb/d of Saudi crude. The UAE's ADCOP pipeline handles approximately 1.5 mb/d of UAE crude. The Kirkuk-Ceyhan pipeline handles Iraqi crude at approximately 250,000 b/d currently. Vessels can also reroute via the Cape of Good Hope, adding 10-15 days to Europe and 5-8 days to East Asia at an extra cost of $300-800K per voyage. None of these alternatives can transport LNG.
Can Qatar export LNG without using the Strait of Hormuz?
No. There is no pipeline that can transport LNG from Qatar to any destination outside the Persian Gulf. All of Qatar's LNG must exit the Gulf through the Strait of Hormuz on LNG carriers. Qatar's entire production infrastructure (at Ras Laffan) is on the Qatari Gulf coast. During the 2026 disruption, QatarEnergy declared force majeure on LNG deliveries, directly affecting European and Asian gas supplies.
How wide is the Strait of Hormuz?
The Strait of Hormuz is approximately 90 nautical miles long. Its narrowest navigable point is approximately 21 nautical miles (39 km) wide. However, the mandatory Traffic Separation Scheme within that width restricts commercial vessels to lanes of approximately 2 nautical miles each, with a 2-nautical-mile separation zone between inbound and outbound lanes. The total TSS width of approximately 6 nautical miles is the effective shipping corridor.
What happened to shipping through the Strait of Hormuz in 2026?
A regional military conflict beginning in early 2026 caused shipping traffic to fall from approximately 3,000 vessels per month to 191 vessels in April 2026, per Kpler analytics data cited by CNN. The traffic reduction was driven primarily by war risk insurance withdrawal (making transit uninsurable or commercially prohibitive), charterer decisions to suspend Gulf voyage instructions, and vessel operator decisions to avoid the area. Oil prices rose above $100 per barrel. QatarEnergy declared force majeure on LNG deliveries. Pipeline bypass routes absorbed a fraction of the diverted volumes.
What is war risk insurance for tankers?
War risk insurance covers vessel owners against losses arising from war, acts of war, hostile acts, capture, seizure, and related perils, risks excluded from standard H&M (Hull and Machinery) and P&I policies. The war risk market is centered at Lloyd's of London. The Joint War Committee (JWC) maintains a list of elevated-risk areas; vessels entering these areas require additional war risk coverage. When war risk premiums spike or coverage is withdrawn, vessels effectively cannot transit the affected area without voiding their standard insurance.
What is UNCLOS transit passage rights and how does it apply to Hormuz?
Article 38 of the United Nations Convention on the Law of the Sea (UNCLOS) establishes the right of transit passage through international straits used for international navigation. This right applies to all ships and aircraft, including warships, and cannot be suspended by coastal states. The Strait of Hormuz qualifies as an international strait under UNCLOS. This means no coastal state can legally close the strait to international transit. However, the existence of a legal right does not guarantee the practical ability to exercise it safely or while insured.
Glossary of Hormuz and Maritime Chokepoint Terms
Strait of Hormuz: A narrow waterway between Iran and Oman connecting the Persian Gulf to the Gulf of Oman and Arabian Sea. The world's most important oil transit chokepoint.
Persian Gulf: An enclosed body of water bordered by Iran, Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar, UAE, and Oman (Musandam). All primary marine oil and gas export infrastructure for these countries is on Gulf coasts.
Gulf of Oman: The body of water connecting the Strait of Hormuz to the Arabian Sea. Vessels exiting the Persian Gulf through Hormuz enter the Gulf of Oman before reaching the open ocean.
Chokepoint: A narrow maritime passage through which a large volume of trade must pass, creating a strategic vulnerability if disrupted.
VLCC (Very Large Crude Carrier): A crude oil tanker of 200,000-320,000 DWT, typically carrying 2-3 million barrels of crude oil per voyage. The dominant tanker class for Gulf crude export trades.
Traffic Separation Scheme (TSS): A mandatory routing arrangement established by IMO under COLREGS, designating inbound and outbound lanes for vessels transiting a narrow passage. The Hormuz TSS establishes 2-nautical-mile inbound and outbound lanes separated by a 2-nautical-mile buffer zone.
UNCLOS (United Nations Convention on the Law of the Sea): The international treaty governing rights and responsibilities in the world's oceans, including transit passage rights through international straits (Article 38).
Transit passage rights: The right of all ships and aircraft under UNCLOS Article 38 to navigate through international straits used for international navigation, regardless of the preferences of coastal states. Cannot be suspended.
Territorial waters: The 12-nautical-mile zone from a coastal state's baseline over which it has full sovereignty, including the right to regulate (but not block) innocent and transit passage.
AIS (Automatic Identification System): A mandatory tracking system on commercial vessels that broadcasts vessel identity, position, speed, and course. Used by port authorities, VTMS, and commercial analytics firms (Kpler, Vortexa) to track vessel movements.
VTMS (Vessel Traffic Management System): A shore-based traffic monitoring and coordination system managing vessel movements in a defined area, similar to air traffic control for ships.
War risk insurance: Marine insurance covering vessel owners against losses from war, hostile acts, capture, seizure, and related perils excluded from standard H&M and P&I policies. Centered at Lloyd's of London.
Joint War Committee (JWC): A committee of Lloyd's of London marine underwriters that publishes and maintains a list of elevated-risk areas for hull war, strikes, terrorism and related perils.
War list port/area: A port or maritime area listed by the JWC as elevated-risk, requiring specific additional war risk premium and owner notification for vessel visits.
Navigation prohibition: A condition in a vessel's H&M or P&I policy restricting the vessel from entering defined elevated-risk areas without prior notification, additional premium, or both.
Force majeure (charterparty): A charterparty clause releasing one or both parties from their obligations when performance is prevented by events beyond their control. Applicability to Hormuz transit disruptions depends on the specific form and clause language.
War risk additional premium (AWRP): An additional insurance premium charged per voyage when a vessel transits or operates in a JWC-listed elevated-risk area.
P&I insurance (war exclusion): Standard P&I club cover excludes war risks. A separate war risk entry is required from a war risks insurer or specific IG club war risks cover.
East-West Pipeline (Petroline): Saudi Arabia's 1,200km bypass pipeline from Abqaiq on the Arabian Gulf coast to Yanbu on the Red Sea, bypassing Hormuz. Capacity approximately 5-7 million b/d.
ADCOP (Abu Dhabi Crude Oil Pipeline): The UAE's 360km bypass pipeline from Habshan to Fujairah on the Gulf of Oman. Capacity approximately 1.5 million b/d.
Kirkuk-Ceyhan pipeline: Iraq-Turkey pipeline connecting northern Iraqi fields to the Turkish Mediterranean port of Ceyhan. Design capacity approximately 1.6 mb/d; politically unreliable.
Cape of Good Hope rerouting: Maritime rerouting of tankers around southern Africa instead of through Hormuz and Suez. Adds 10-15 days to Europe and 5-8 days to East Asia, at approximately $300-800K additional cost per voyage.
LNG (Liquefied Natural Gas): Natural gas cooled to -162°C for transport in liquid form. Cannot be transported by pipeline over intercontinental distances; requires purpose-built LNG carriers.
LNG carrier: A purpose-built vessel with insulated cargo tanks maintaining LNG at -162°C. The only means of transporting Qatari LNG to export markets.
Ras Laffan: Qatar's LNG production and export terminal on the Persian Gulf coast. The largest single LNG export facility in the world. All Qatari LNG exports depart from Ras Laffan through the Strait of Hormuz.
Ras Tanura: Saudi Arabia's primary crude oil export terminal on the Persian Gulf coast, operated by Saudi Aramco. The world's largest offshore oil loading facility.
OPEC+ production cuts: Coordinated production reductions by OPEC members and partner countries including Russia. Reduced Hormuz volumes between 2022 and 2024 as Saudi Arabia, Kuwait, and UAE cut output.
Kpler: A maritime and commodity analytics firm providing real-time tanker tracking and cargo flow data. Cited as a data source for Hormuz vessel transit statistics during the 2026 disruption.
Vortexa: A maritime analytics firm providing real-time tanker tracking and energy cargo flow data. Cited by EIA as the source for Hormuz flow volume analysis.
Tonne-mile demand: A measure of shipping demand combining cargo volume (tonnes) with distance (nautical miles). Cape of Good Hope rerouting increases tonne-mile demand by extending voyage distances.
Strategic Petroleum Reserve (SPR): Oil reserves held by IEA member governments for emergency release during supply disruptions. US SPR holds approximately 370 million barrels; coordinated IEA releases have been used in past supply shocks.
References
U.S. Energy Information Administration. Amid regional conflict, the Strait of Hormuz remains critical oil chokepoint. eia.gov/todayinenergy/detail.php?id=65504 (June 2025, with 2026 context)
International Energy Agency. Strait of Hormuz. iea.org/about/oil-security-and-emergency-response/strait-of-hormuz
Kpler analytics. Hormuz vessel transit data, April 2026. Via CNN, May 5, 2026
Lloyd's List Intelligence. Hormuz monthly vessel counts. Via CNN, May 2026
Al Majalla. Assessing the options for bypassing the Hormuz Strait. majalla.com (April 17, 2026)
Hormuz Strait Monitor. Alternative Shipping Routes. hormuzstraitmonitor.com/alternative-routes/ (April 2026)
Britannica. Strait of Hormuz. britannica.com/place/Strait-of-Hormuz (updated June 2026)
CNN. How traffic through the Strait of Hormuz shrank to a trickle. cnn.com (May 5, 2026)
The National. How Strait of Hormuz disruption is forcing Gulf transit towards pipelines and rail. thenationalnews.com (May 17, 2026)
CNBC. The Strait of Hormuz: Alternative routes for oil exporters. cnbc.com (April 23, 2026)
IMO. Traffic Separation Scheme, Strait of Hormuz. imo.org
UNCLOS. Article 38: Right of transit passage. un.org/depts/los/convention_agreements
Vortexa. Tanker tracking analytics methodology. vortexa.com
Carra Globe. Strait of Hormuz Closure 2026: What It Means for Your Supply Chain. carraglobe.com (May 2026)
Disclaimer: This article is written for educational and informational purposes only. Data on the 2026 regional conflict and its effects on Hormuz shipping are sourced from named third-party analytics firms (Kpler, Vortexa) and official government energy agencies (EIA, IEA) as cited. The situation described is ongoing and evolving; readers should consult primary sources for the most current information. Nothing in this article constitutes investment advice, commodity price forecasts, or insurance guidance. Shipfinex operates under VARA In-Principle Approval in Dubai. Final VARA license is pending.
Vivek Seth
Chairman, Shipfinex Board
Vivek Seth is Chairman of Shipfinex. As former Senior Vice President of Marine Services at ADNOC Logistics and Services, one of the world's largest maritime operators, he has direct experience across tanker operations, LNG carrier markets, and marine asset management. His career spans fleet management, LNG project logistics, and maritime strategy across the Middle East and Asia.
