[Orient Shipping | Tanker] US-Iran Conflict Escalates to Dual Choke Point Blockade; Lasting Peace Agreement Still Prerequisite for Normalization of Crude Output and Exports; Focus on Bottom-Laying Opportunities

English summary

The US-Iran military conflict continued to expand last week. The US continued to strike Iranian naval, missile, air defense and coastal facilities, while Iran continued to attack US military targets in Gulf states and ships in the Strait of Hormuz. Transit through the Strait of Hormuz remained at about 10-20 vessels/day, roughly back to levels during the blockade. Meanwhile, Houthi forces announced a "maritime blockade" on Saudi Arabia; Clarksons data shows tanker transits through the Bab el-Mandeb have dropped from ~3/day in April-June to 1/day. The conflict has upgraded from a single blockade of Hormuz to a dual choke point blockade. Current transits face uncertainties in safety, insurance, shipping routes and navigation controls; the pace of reopening will depend on when the US-Iran conflict ends. We believe a lasting peace agreement remains a prerequisite for normalizing regional crude output and exports. Diplomatic channels are not fully closed, but short-term breakthrough remains difficult. ...