Slowdown in shipping traffic through the Strait of Hormuz amid renewed regional conflict

Shipping data showed that fewer vessels transited the Strait of Hormuz on Wednesday, the first day after the United States reimposed its naval blockade on Iranian ports, amid an escalation of attacks by both countries across the Gulf.

Data from the Kpler platform indicated that nine ships passed through the strait on Wednesday, mostly via the Iranian route, down from 13 the previous day. No supertankers or liquefied natural gas carriers were observed transiting the strait.

U.S. Central Command stated that it disabled an empty oil tanker after it attempted to sail toward Iran’s Kharg Island despite repeated warnings, firing Hellfire missiles at the vessel’s funnel.

The U.S. military said its forces altered the course of two ships and disabled another since the resumption of the naval blockade on Iran on Tuesday.

Hostilities have intensified since Iran announced late Saturday the closure of the Strait of Hormuz.

Military operations are preventing ships from using this vital waterway, through which approximately 20 percent of global oil and gas shipments passed before the war.

Kpler data indicated that a Suezmax tanker carrying one million barrels of Saudi crude oil exited the strait on Tuesday with its transponder turned off.

The Kuwaiti Crude Index fell by $2.97 to $84.97 per barrel in Wednesday trading, down from $87.94 in Tuesday’s trading, according to the Kuwait Petroleum Corporation.

In global markets, oil prices fell on Wednesday morning as investors took profits and assessed risks stemming from a new wave of U.S. strikes targeting Iranian military facilities, fueling fears of a return to full-scale war and disruptions to supplies through the Strait of Hormuz.

The United States launched strikes on Iranian coastal missile defenses and sites on Wednesday after reimposing the naval blockade on Iranian ports, while Iran threatened to disrupt further energy exports from the region, stating it is engaged in a “war of survival” with the United States.

After rising for a fourth consecutive session at the start of trading, Brent crude futures fell 24 cents, or 0.28 percent, to $84.95 per barrel, while U.S. West Texas Intermediate (WTI) crude futures dropped 15 cents, or 0.19 percent, to $79.45 per barrel.

Brent crude had risen by about $1 earlier in the session, with both benchmarks remaining near their highest levels in a month.

“Geopolitical risks continue to provide strong support for oil prices, but after a strong upward wave, traders are adopting a wait-and-see approach... The focus has shifted from the threat itself to whether it will lead to any tangible disruption in oil flows, and how both the United States and Iran will respond in the coming days,” said Priyanka Sachdeva, chief market analyst at Philip Nova.

Oil prices rose this week amid worsening supply disruptions in the Strait of Hormuz due to attacks.

Shipping data showed that fewer vessels transited the Strait of Hormuz on Wednesday, the first day after the United States reimposed its naval blockade on Iranian ports. Kpler platform data revealed that seven ships passed through the strait, down from 13 the previous day.

Combat operations between Iran and the United States resumed last week, undermining the fragile ceasefire reached in June after months of exchanged attacks.

Hiroyuki Kikukawa, an analyst at Nippon Securities Investment, said, “Despite ongoing mediation efforts by neighboring countries and the majority view that a full-scale war is unlikely, West Texas Intermediate crude could rise to between $85 and $87 per barrel, depending on how the conflict unfolds.”

Analysts say Iran has indicated it might use its Yemeni Houthi allies to close the Bab al-Mandab strait leading to the Red Sea, opening a new front against Washington and putting two of the world’s most critical energy chokepoints at risk.

Reuters reported on Wednesday, citing U.S. officials, that strikes on Iran could pave the way for “more complex” operations against the country, heightening market anxiety and volatility.

Goldman Sachs said Brent crude could exceed $110 in the fourth quarter if Gulf export recovery remains stalled, but might fall to around $60–$69 by year-end if tensions ease and production recovers faster than expected.

ING analysts warned in a note that supply disruptions have resurfaced as U.S. commercial oil inventories dropped to their lowest levels since 2022 and to their lowest for this time of year since 2018.

They added, “The concern is that renewed oil supply disruptions come at a time when the market has seen significant inventory drawdowns in the second quarter, making it more vulnerable to volatility and risks.”

Data from Kpler and an informed source indicated that Iraqi crude loading volumes more than doubled to an average of approximately 1.2 million barrels per day in the first half of July, as export shipments accelerated after months of shipping restrictions.

French energy company TotalEnergies said in an initial results report today that sustained energy price increases resulting from the Iran war are expected to boost its second-quarter profits.

The U.S.-Israeli war on Iran, followed by the Islamic Republic’s effective closure of the Strait of Hormuz, disrupted global supplies and pushed crude oil and gas prices to multi-year highs, generating substantial gains for major energy companies.

Shell and BP both reported strong results last week.

Benchmark Brent crude reached multi-year highs, averaging around $97 per barrel during the April–June quarter, up 45% from $67 per barrel in the previous year.

TotalEnergies will announce its second-quarter results on July 23.

The International Energy Agency warned that full implementation of China’s export restrictions on rare earth elements could jeopardize approximately $6.5 trillion worth of production outside China.

In October 2025, China, the world’s largest producer of rare earth elements, expanded its export controls to include additional materials and imposed new licensing requirements, before later agreeing to delay enforcement of these measures for one year.

The agency noted in its report that if these controls are fully implemented, supply chains in sectors such as automobiles, advanced technology, defense, and energy—accounting for roughly $6.5 trillion in production—could face disruptions.

The report added that the United States and Europe would bear nearly half of the expected economic impact, and Fatih Birol, the Agency’s Executive Director, clarified: “Our latest analysis shows that vast amounts of economic value depend on relatively small quantities of critical minerals, whose supply chains remain highly concentrated, making them vulnerable to risks.”

On Thursday, the British government announced the nationalization and full acquisition of British Steel, which had previously been owned by a Chinese company, in an effort to safeguard the future of the country’s steel production.

The British government confirmed that the transfer of ownership of British Steel to the public sector is based on overriding national interest, aiming to preserve the country’s sovereign capacity for domestic steel production and avoid total reliance on imports, according to Reuters.

Outgoing British Prime Minister Keir Starmer stated: “Today’s decision secures the future of the steel industry in the United Kingdom, protects high-skilled jobs, and maintains a vital national capability essential for national security and economic resilience.”

Legislation to nationalize British Steel received final approval on Wednesday, following the government’s failed efforts to find a suitable private-sector buyer for the company, which had been privatized during the tenure of the late Prime Minister Margaret Thatcher in 1988.