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European Oil Markets
27JUL

500 ships idle as Hormuz stays shut

3 min read
10:27UTC

Zero new tankers crossed Hormuz in the 24 hours after Trump's signature; more than 500 ships stayed anchored as Bimco called a crossing very risky.

← Back to Saudi crude reroutes to Suez, freight bitesJump to analysis ↓
EconomicDeveloping
Key takeaway

Brent priced an open strait that no tanker actually crossed; insurers still block transit.

Zero Hormuz tankers transited in the 24 hours after Trump's 16 June signature, despite his declaration that the strait was open. The two crossings logged on 15-16 June were toll passages under the Islamic Revolutionary Guard Corps (IRGC) authority, Iran's military force that controls mine routes and passage conditions, not a reopening . More than 500 ships remain parked in the Gulf 1. BIMCO, the world's largest shipowner association, calls a crossing "very risky": the floating mines are still live, no IRGC order has cleared the lanes, and not one Protection and Indemnity (P&I) club, the London-based mutual marine insurers, has lifted its Hormuz war-risk exclusion 2.

The insurance point drives the lanes more than the mines do. A tanker without P&I cover cannot dock, because terminals and lenders refuse an uninsured hull. The blockade now runs through London insurance underwriters as much as through Iranian mines, and every owner knows it. Jakob Larsen, BIMCO's chief safety officer, said owners "still consider it very risky to commence transits at this point" while the mines stand uncleared.

Brent Crude, the global benchmark that prices roughly two-thirds of internationally traded oil, fell to between $78.82 and $81.55 on the signing, down as much as 5 per cent 3, near the two-month low it touched a week ago on deal optimism . Markets priced the expectation of an open strait. No moving ship lay behind the fall, because the lanes held zero new transits. The price moved; the cargo did not.

Deep Analysis

In plain English

When a ship sails through a war zone, it needs special war-risk insurance. The P&I clubs, mutual insurance associations based in London, provide this cover for roughly 90 per cent of the world's ships. They said on 16 June that the Hormuz strait is still too dangerous to cover, because Iranian military mines remain in the water and nobody has officially certified them as swept. Without that cover, a shipowner who loses a vessel in the strait cannot claim for the loss. No credible insurer will touch an active mine zone. This is why 500 ships are sitting in the Gulf, not because their owners do not want to move, but because sailing uninsured through an uncleared mine field is commercially and legally impossible.

Deep Analysis
Root Causes

The 500-ship backlog and zero-transit outcome have two distinct root causes. The mine threat is physical: CENTCOM's own assessment by mid-May was that 90 per cent of Iran's naval mine stockpile was warehoused, not in-water, but the remaining deployed mines have not been certified as swept. Bimco's Jakob Larsen cited active mines as the primary safety barrier.

The P&I club constraint operates through the International Group of P&I Clubs, which covers roughly 90 per cent of the world's ocean-going tonnage. The group sets a collective de-risk bar that no individual member club can unilaterally lower without triggering reinsurance withdrawal by the London market. P&I clubs cannot issue standard hull and liability cover for a zone the Lloyd's Joint War Committee lists as enhanced-risk without a UN resolution or government certification of safety.

What could happen next?
  • Consequence

    P&I de-listing of Hormuz requires mine clearance certification or a UN resolution; the 60-day nuclear talks window does not address either condition.

  • Risk

    Oil markets pricing a reopening that has no ships behind it face a correction risk if Friday's ceremony also fails to produce mine clearance progress.

Sources:Argus Media·Fortune
Mentions:BIMCO →Islamic Revolutionary Guard Corps (IRGC) →Strait of Hormuz →Brent Crude →Persian Gulf Strait Authority →Tanker War →London →Ports and Maritime Organisation →Iran →Operation Earnest Will →Norway →Yemen →Brent-WTI →TrumpIRA.gov →Jakob Larsen →P&I →
First Reported In

Update #130 · Trump signed the war over; it kept going

Argus Media· 17 Jun 2026
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Causes and effects
Caused by
Hormuz logged two ships, not 94
The two IRGC toll transits on 15-16 June were explicitly not a reopening, establishing the zero-new-transit baseline that persisted after the MOU signing.
Occurred 15 Jun 2026
Read story →
Brent hits two-month low on deal bets
Brent's fall to $78.82–$81.55 on 16 June extended the two-month low reached near $87.33 as markets priced deal optimism that preceded any actual reopening.
Occurred 12 Jun 2026
Read story →
This Event
500 ships idle as Hormuz stays shut
An open strait on paper means nothing while mines are live, insurers refuse cover, and the IRGC has cleared no lanes.
Led to
Insurers and mines keep Hormuz shut
The zero new tanker transits logged after Trump's order (ID:4270) continued into 18-19 June as the mine and insurer reality persisted.
Occurred 18 Jun 2026
Read story →
Different Perspectives
Asian buyers (India, Japan, China, South Korea)
Asian buyers (India, Japan, China, South Korea)
Asian refiners are absorbing 62% of Yanbu's 3.75m b/d flow, the bulk of Saudi Arabia's rerouted crude now clearing east rather than into the Atlantic basin. That destination split leaves Asian buyers more exposed to any single Yanbu-specific disruption than under the kingdom's normal multi-terminal export pattern.
Russia / Lukoil
Russia / Lukoil
Moscow loses the roughly $14-a-barrel legal headroom the frozen price-cap formula would otherwise have released toward $58, even as Urals trades below Russia's own $59 budget floor. The shadow-fleet insurance workaround the freeze leaves untouched remains the actual route sanctioned crude clears above $44 in practice.
European Union / Council
European Union / Council
Brussels adopted its 21st sanctions package on 23 July, letting boarding states confiscate and sell shadow-fleet cargo outright and freezing the G7 price cap's automatic adjustment to mid-2027, converting indefinite tanker storage into recoverable value for enforcers.
Freight and tanker desks
Freight and tanker desks
The Baltic Exchange's TD3C VLCC benchmark, most desks' reference for Gulf freight, prices a single-vessel voyage while Saudi shippers now pay for two Suezmax charters at roughly double the transit time. That gap leaves any book hedged purely on TD3C carrying unrecognised Suezmax basis risk on the bulk of Saudi rerouted volume.
Mediterranean refiners (Sines, Trieste, Augusta)
Mediterranean refiners (Sines, Trieste, Augusta)
Refiners already facing aframax rates up 198% month-on-month now watch Ain Sokhna draw 23% of Yanbu's rerouted crude through the same SUMED corridor they lean on for product backfill. Fujairah and ARA stocks near record lows leave little room to absorb a thinner Suez product flow.
Saudi Arabia
Saudi Arabia
Riyadh has rerouted its entire western-coast crude book through Yanbu and Suez since the 23 July Bab el-Mandeb embargo, absorbing a roughly $2m-per-voyage Suezmax premium on every diverted cargo. The kingdom's fiscal breakeven near $108 a barrel makes that freight cost, not the blockade itself, the more durable drag on export economics.