28JUL

Hormuz logged two ships, not 94

3 min read

09:28UTC

Two ships transited the Strait of Hormuz across 15-16 June, against a pre-war rate of 94 a day. The memorandum promises a full reopening on Friday, yet not one major operator has routed a tanker through on the strength of it.

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Key takeaway

Markets are pricing the gap between the signed deal and a moving tanker, not the deal itself.

Two ships transited the Strait of Hormuz across 15-16 June, the 33-kilometre Gulf chokepoint that carries about a fifth of the world's seaborne oil. ¹ Before the war the strait handled roughly 94 vessels a day. The newly signed memorandum promises a full reopening when the deal is formalised in Geneva on Friday, yet no major operator has sent a tanker through on the strength of it.

Underwriters, not nerves, keep the tankers in port. Protection-and-indemnity clubs, the mutual insurers that cover a vessel's third-party liability, will not underwrite a Hormuz crossing while the IRGC, Iran's Islamic Revolutionary Guard Corps, still runs the toll authority it set up on 5 May and has refused to dissolve. Iran reasserted its sovereignty over the strait and its right to charge for passage the day of the signing , so the clubs have no security grounds to reinstate cover. Without cover, no major charterer sails. Jotaro Tamura, a shipping executive quoted by the Financial Times, said operators will wait weeks until conditions change "on the water". ²

Brent Crude settled near $83.61, down a further 4.3 per cent and below the two-month low it had already reached when the deal first looked probable . That is not a peace dividend. Traders are pricing the distance between signed paper and a moving tanker, discounting the chance that Friday produces actual flows rather than a ceremony. Lower crude eases fuel costs for importers, but with the toll authority intact and the underwriting absent, the relief rests on cargoes no one will yet insure.

Deep Analysis

In plain English

The Strait of Hormuz is a narrow waterway between Iran and Oman through which roughly one-fifth of the world's oil travels. Before the war, about 94 ships passed through each day. On 15-16 June, only two did. Shipping companies cannot send a vessel worth hundreds of millions of pounds into the strait without insurance covering seizure or damage. Protection-and-indemnity clubs, which cover almost all large cargo ships, have refused to write that cover since March. The major insurance clubs, which together cover almost all big cargo ships, will not write that cover while Iran's military still controls the waterway and there is no written, legally binding safety framework. A signed-but-unpublished diplomatic document does not change that. Until the insurance question is resolved, oil tankers will wait outside regardless of what politicians announce.

Deep Analysis

Root Causes

P&I cover for Hormuz transits ceased because two separate legal conditions remain unmet. First, Lloyd's Joint Hull Committee guidance, circulated on 19 May 2026 , requires either a written rules-of-engagement document from the 26-nation coalition or a published PGSA (Persian Gulf Strait Authority) transit framework before the market will price the route.

Neither exists. Second, the IRGC's Persian Gulf Strait Authority, created 5 May, has registered zero commercial vessels; the MOU does not dissolve the PGSA, meaning the authority that P&I clubs treat as an extortion mechanism remains operational on the day of the signing.

The market's assessment is therefore that paper diplomacy has not changed the operational facts: the IRGC can still board, delay or seize vessels in Iranian territorial waters, and no insurer has indemnity protection against that outcome.

What could happen next?

Consequence
P&I clubs will not restore cover until either a UN Security Council resolution or a published government certification of safe transit exists, conditions that neither the MOU nor the Geneva ceremony address.
Short term · Assessed
Risk
If a vessel transits without P&I cover and is seized or damaged, the resulting uninsured loss falls on the ship owner directly; no government indemnity mechanism currently exists.
Immediate · Assessed
Opportunity
Iranian crude re-entering the market at full pre-war volume would release approximately 1.5 million barrels per day, worth roughly $4-5 per barrel on the Brent price, if Hormuz fully reopens within a 60-day window.
Medium term · Suggested

Source Landscape

This story draws on centre-leaning sources from United Kingdom

United Kingdom

LeftRight

Primary parallel: In 1984-1988, during the Iran-Iraq Tanker War, Lloyd's of London suspended standard war-risk cover for Persian Gulf voyages, and the US, UK, and Kuwait reflagged tankers under naval escort. Even with naval escort, P&I clubs demanded government indemnity letters before restoring cover; the legal mechanism was a Letter of Undertaking from the UK Ministry of Defence, not a diplomatic declaration.

Counter-parallel: After the 2002 MSC Limburg oil tanker bombing off Yemen, Lloyd's de-listed The Gulf of Aden within 72 hours and restored cover only after EUNAVFOR (European Union Naval Force) published a set of Best Management Practices that insurers could price. The Yemen precedent suggests the restoration trigger is a written, third-party-verified safety framework, not a bilateral ceasefire between Iran and the United States.

Brent settled at $83.61 on 15 June, down 4.3 per cent from the prior session, as markets priced no immediate operational reopening rather than the deal itself. The trajectory from $96.34 on 10 June to $83.61 on 15 June represents a roughly $13 price decline tracking diplomatic probability, not physical supply change.

The physical supply equation has not moved. Iranian crude exports ran at 209,000-260,000 barrels per day during the conflict, against 1.84 million pre-war, a reduction of roughly 86 per cent. Even full Hormuz reopening would take weeks to months for tanker positioning, cargo scheduling and insurance reinstatement to restore physical flows.

The UAE national oil company ADNOC assessed that full Hormuz flows will not resume until 2027 regardless of when the MOU takes legal effect . The price decline on 15 June therefore prices in a deal announcement, not a supply restitution.

Consensus view: The International Group of P&I Clubs, which underwrites 90 per cent of global oceangoing tonnage, suspended Hormuz war-risk cover in March when the IRGC first asserted toll authority.

IUMI (International Union of Marine Insurance) analysts note that P&I clubs are mutual insurers whose members bear each other's claims; accepting a single VLCC (Very Large Crude Carrier) loss in a war zone before the legal status of the chokepoint is resolved could expose all 13 mutual clubs to catastrophic pooled liability, making the refusal a structural rather than commercial decision.

Counter-view: Gulf Research Centre shipping analysts in Dubai argue that the transit rate of two vessels over two days, compared with 94 a day pre-war, overstates the shutdown. They cite the 23 April AIS-dark-transit pattern as evidence that vessels are moving through the strait without broadcasting their position, and that the true transit count is higher than the published figure.

Key tension: Whether the effective closure of Hormuz is a P&I underwriting crisis (soluble by a published rules-of-engagement framework or UN resolution) or an IRGC command decision that no insurance instrument can override.

First Reported In

Update #129 · Iran deal signed, but no paper to show

Financial Times· 16 Jun 2026

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Causes and effects

Caused by

Iran and US name Hormuz two ways

Iran's assertion of Hormuz sovereignty and paid passage on 15 June kept the IRGC toll authority operational, blocking P&I cover for tanker transits.

Occurred 15 Jun 2026

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Brent hits two-month low on deal bets

Brent's further fall to $83.61 extended the two-month-low trajectory that began when markets priced 80 per cent deal probability.

Occurred 12 Jun 2026

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This Event

Hormuz logged two ships, not 94

Insurers, not Iranian permission, hold the strait shut; without P&I cover no major charterer sails whatever the memorandum says.

Led to

500 ships idle as Hormuz stays shut

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 16 Jun 2026

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Different Perspectives

Iran's Supreme Leader's office and Iranian households

A letter published through state media named Lebanon's territorial integrity and an end to Israeli operations there as the war's ending condition; the same week, spokesperson Mohajerani cut the subsidised petrol ration from 70 to 50 litres a month. Iranian agencies still disagree on who inside the office signed the letter.

Oman

Muscat proposed a voluntary-funded coalition to police Hormuz, the corridor its own coastline gives it standing to manage, while Iran wants control and toll rights over shipping and Washington insists on free navigation. Oman's remit stops at the strait; it has no comparable claim over Iraq, the Caspian, or Lebanon.

Kyiv

President Volodymyr Zelenskyy confirmed the Caspian strike on an Iranian vessel carrying military cargo from Russia's Astrakhan region, opening a front that ties Iran's war to its supply relationship with Moscow rather than to anything the Gulf mediators are discussing.

Riyadh

Maj Gen Turki Al Malki named Iraq as the launch point for drones intercepted over the Eastern Province and Riyadh, the first time this war has reached Saudi Arabia from that direction rather than from Yemen. Nothing landed, but a second launch geography aimed at Saudi oil now exists alongside the Houthi front.

Baghdad

Iraq's Foreign Ministry summoned its own ambassador in Riyadh after Saudi Arabia's Defence Ministry said the drones came from Iraqi territory, while the same day drones struck Iranian-Kurdish opposition camps inside Iraq. Baghdad is disowning attacks it did not launch from territory it does not fully control.

The Pentagon and Congress

Acting press secretary Joel Valdez attributed the toll's reversal to site anomalies, the same explanation the department gave for the opposite cut on 24 July; Representative Thomas Massie called the category change an absurd ruse designed to reset the war's legal clock. Neither side agrees on which explanation, or which war, is real.