Iran announced on Friday (April 17) that the Strait of Hormuz is open to all ships. Shortly after, US President Trump also posted on social media claiming that the Strait of Hormuz has been opened. The news led to a global drop in oil and gas prices, a rise in the stock market, but tanker companies and oil traders expressed cautious optimism.
Iran’s Foreign Minister Abbas Araghchi posted on X that the shipping lanes of the Strait of Hormuz are fully open, but require coordination with approved routes by the Iranian government.
Bloomberg interviewed dozens of shipping companies, agents, brokers, and traders, with most believing that Iran’s statement lacks details, leading to a cautious wait-and-see approach before making any responses.
Farhad Patel, director of Sharaf Shipping Agency, a Dubai-based company cooperating with many shipping companies in the Middle East, stated that while this move could help restore some shipping operations and ease direct pressure on energy transportation, the operational environment remains highly controlled and sensitive, urging a cautious and optimistic outlook in the market.
Patel also mentioned that current restrictions, inspections, and simultaneous enforcement by the US and Iran in the strait indicate that shipping operations have not returned to normal.
According to Bloomberg’s ship tracking data, in the hours following the announcement, vessels did not rush to pass through the Strait of Hormuz. Shipowners revealed that so far no company is willing to take the risk of verifying the route’s safety firsthand.
Bloomberg’s ship tracking data shows that at least 135 million barrels of crude oil and refined petroleum products are currently stuck on tankers in the Persian Gulf, including oil loaded at the end of February and the first half of March. Even if the strait is fully open, it would take weeks for vessels to reach their destinations after leaving the strait, indicating that the region may take months or even years to fully restore normal oil and gas production.
Several individuals involved in transporting goods through the Strait of Hormuz have indicated that they believe Iran has laid mines near traditional routes close to Oman, thus navigation is not entirely free. President Trump’s post mentioned that the US military is working to clear these mines.
Jakob Larsen, Chief Security Officer at the Baltic and International Maritime Council (BIMCO), stated that the current threat from mines remains unclear, advising shipping companies to consider avoiding the area since the Strait of Hormuz is not fully open. Reports from the UK Maritime Trade Operations Consultancy also noted that the area remains volatile, with ongoing military activities posing a continuous threat to commercial shipping.
Another unresolved issue is insurance. Several shipowners mentioned they will start negotiating transit insurance prices, some even mentioning that insurance rates must decrease before crossing the strait.
Previously, Iran had suggested that passage fees need to be paid for approved routes by the Iranian government, a condition not accepted by shipping companies and the International Maritime Organization (IMO). Araghchi’s recent statement did not mention this point, nor did it explain if shipowners need to contact Iranian authorities for transit procedures, which is a major concern for shipping companies.
According to Araghchi’s statement, Iran agreed to open the strait in response to the ceasefire agreement in Lebanon, which depends on whether Israel continues its attacks. An Iranian semi-official Fars News Agency report indicated that if the US does not lift sanctions, Iran would close the Strait of Hormuz.
Neil Crosby, Research Director at Sparta Commodities, believes shipping companies need confidence to mass-send ships through the strait, but even if they proceed, agreements could still potentially break down along the way.