13MAY

Hormuz logged two ships, not 94

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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

Turkey

Turkey, a major buyer of Russian diesel cargoes, loses that access under Moscow's first producer-binding export ban, in force from 8 July to 31 July. Ankara hosted the same week's NATO summit pledging EUR 70bn to Ukraine, sitting on both sides of the fuel-and-alliance ledger.

NATO

NATO leaders meeting in Ankara on 7 and 8 July pledged EUR 70bn in equipment, assistance and training for Ukraine across 2026, with a 2027 sustainment commitment and a $40bn Drone Edge counter-drone initiative. European allies now fund the vast majority of that package, filling the gap left by Washington's idled crude waiver.

India

India's state refiners continued buying discounted Urals crude as June's price fell to $63.18 a barrel, insulating New Delhi from the OFAC waiver gap still constraining Western buyers. Indian refiners could pick up diesel-export share as Russia's producer-binding ban shuts out its former customers.

China

China's independent refiners kept importing discounted Urals crude through June as the price fell to $63.18 a barrel, down 26% month-on-month per CREA. Beijing has said nothing on Moscow's new diesel ban, leaving Chinese refiners a likely beneficiary if Turkish and Brazilian buyers seek replacement cargoes.

United States

No successor licence has been issued since General License 134C lapsed on 17 June, leaving a 26-day gap, the longest of the war, in the Russian crude waiver. Washington's silence is tightening the channel without any stated decision, as Treasury weighs whether to let it die.

Ukraine

Ukraine's long-range strike campaign shifted from refineries to seaborne fuel tankers crossing the Sea of Azov, cutting tracked vessel traffic 55% between 30 June and 11 July, per Starboard Maritime Intelligence. The shift targets Russia's export revenue directly rather than just domestic supply, adding pressure alongside the collapsing Urals price.