Minimal Impact on Oil Flows Through Hormuz Amid Israel-Iran Conflict

The movement of cargo through the Strait of Hormuz has seen a minor decrease, but there has been no significant disruption to key infrastructure so far, easing some of the worst fears regarding the ongoing conflict between Iran and Israel. On June 15, 111 tankers passed through the Strait of Hormuz, down from 116 on June 12, according to the Joint Maritime Information Center (JMIC) announcement on Tuesday. Tel Aviv launched attacks against Iranian nuclear installations and senior military officials a day later. The narrow waterway handles approximately one-fifth of global oil production. ‘The number of transits through the Strait of Hormuz has shown a small reduction in cargo-carrying vessels,’ stated JMIC, part of the Combined Maritime Forces, an international naval coalition based in Bahrain. Crude oil appears to have endured an exceptionally volatile period—reducing large price swings immediately after the outbreak of hostilities—as traders try to assess risks for shipping through Hormuz and broader regional oil production. While there have been attacks on energy infrastructure in both countries, sensitive areas impacting oil prices, such as Hormuz and the key export terminal on Kharg Island, remain unaffected. So far, the main obstacle has been GPS jamming in the Persian Gulf, disturbing traffic at this maritime chokepoint, reported JMIC. Freight rates for transporting crude from the Middle East to China have spiked, and insurers indicated they may increase war-risk premiums when calling the region, but all movements haven’t reached the worst-case scenario feared for oil prices. Bloomberg’s ship-tracking data shows minimal clear signs of change in tanker flows through the waterway. Outbound ships remain largely unchanged compared to just before the airstrikes, though there has been a drop in inbound vessels; it is still too early to determine if this marks a trend.