If the Strait of Hormuz can 'never return to the past'

According to Xinhua News Agency, in May this year, Iran announced the establishment of the 'Persian Gulf Strait Administration' to assert sovereign management over this waterway. Subsequently, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the agency on May 28—even entering into a 'safe passage agreement' with Iran would violate U.S. sanctions, regardless of whether payments are involved. This has created a deadlock: non-payment entails risks to passage; payment violates U.S. sanctions. There are already signs that some industry participants are accepting this reality. In May, tankers operated by Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) successfully transited the Strait; two Very Large Crude Carriers (VLCCs) bound for Japan passed through successfully; a South Korean tanker made its first transit after coordination with Iran; and a Greek shipping company even publicly stated, 'If paying facilitates passage, we are willing to pay.' Daniel Yergin, Vice Chairman of S&P Global, described the current situation as 'a gray zone—neither fully closed nor fully open.' Lloyd’s List likewise noted that an increasing number of industry observers believe the pre-crisis state of free navigation may never fully return. What might the Strait’s 'new normal' look like? Oil prices may need to remain in triple digits as long as deficits persist. Analysts’ base-case scenario is that the Strait reopens in mid-June and linearly recovers to normal levels within three and a half months. However, research also outlines an alternative 'partial reopening' pathway—Iran retains control, and throughput recovers only gradually and incompletely. For the crude oil market, the Strait of Hormuz does not necessarily need to return to 100% capacity, since pipelines can absorb part of the volume. But if recovery remains too low, the supply gap will persist. Several third-party institutions have modeled this scenario as follows: ・Kpler, in its 'Iran-Controlled Scenario' released on April 29: Throughput may recover to 40% of pre-crisis export levels by end-2026, stabilizing at approximately 45% by end-2027. Frictions stem from approval procedures, mandatory routing through Iranian waters, and potential payments to the Islamic Revolutionary Guard Corps (IRGC) for passage. ・Rystad Energy, in its 'Narrow Agreement' base case released on May 26: By end-2026, crude flow through the Strait of Hormuz recovers to about 10 million barrels per day (roughly two-thirds of pre-war levels), with an additional 5 million bpd rerouted via pipelines. ・Daniel Yergin, Vice Chairman of S&P Global, stated on June 3: Passage through the Strait may settle into a 'gray zone—neither fully closed nor fully open.' U.S. sanctions against the 'Persian Gulf Strait Administration' could perpetuate the impasse: non-payment makes passage difficult or dangerous; payment exposes shipowners to U.S. sanctions. ・Lloyd’s List’s assessment: Pre-crisis free navigation may never fully return. The final state could be a 'managed strait' under Iranian control—including identity checks, nationality-based tiering, and fee collection—with throughput recovering to roughly 60–70% of pre-war levels. This is the watershed for oil prices. If recovery remains at only 40–45%, the supply gap will persist into 2027.

"It’s not over yet—the situation is worsening!" HSBC warns: Dual chokepoint disruptions trigger 'extreme compression' across commodities

Successive disruptions to maritime transport chokepoints are triggering a new wave of supply shocks across global commodity markets. Paul Bloxham, HSBC’s Chief Economist, warned on Friday that, as Middle East conflict intensifies, global commodity markets have re-entered a supply-driven phase. Shipping through the Strait of Hormuz has nearly ground to a halt; navigation through the Bab el-Mandeb Strait remains persistently disrupted; and the Black Sea situation has deteriorated again—multiple critical trade corridors are simultaneously under pressure, rapidly escalating supply-chain risks for energy, grain, and chemical products. Fueled by supply concerns, international commodity prices have recently surged across the board. Brent crude briefly breached USD 100 per barrel; European and Asian natural gas prices rose more than 40% month-on-month; wheat prices hit a three-year high; and refined products—including diesel and jet fuel—also continued climbing. Meanwhile, Wall Street institutions—including Goldman Sachs, JPMorgan Chase, and the Royal Bank of Canada—have recently raised their oil price forecasts, arguing that prolonged shipping disruptions could push global commodity markets into a more volatile phase of price repricing. Chokepoint crisis spreads, broadening the scope of supply shocks Industry monitoring data shows that shipping traffic through the Strait of Hormuz has virtually stalled, while geopolitical disturbances have rapidly spilled over into the Bab el-Mandeb Strait—the strategic chokepoint for Saudi crude exports to Asia and for Eurasian trade via the Suez Canal. Simultaneously, Russia-Ukraine naval hostilities in the Black Sea have intensified. With multiple key shipping lanes impaired at once, global commodity supply chains face systemic stress—and market skepticism toward the feasibility of alternative logistics routes continues to deepen. The reason prices did not spike more dramatically over recent months was the proactive release of reserves—including drawdowns from the U.S. Strategic Petroleum Reserve. Yet the effectiveness of this buffer is now rapidly diminishing. As inventories continue to decline, concerns over reaching a critical threshold are resurfacing—potentially triggering nonlinear price surges. As economist Paul Bloxham put it, 'The longer the disruption persists, the higher the risk of sharp, nonlinear spikes in commodity prices.' Under acute supply shock conditions, commodity markets are trending toward fragmentation—evolving into separate, disconnected regional pricing systems.

HSBC CEO says alternative routes could make Strait of Hormuz 'redundant' in five years

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HSBC CEO Georges Elhedery stated that resilient alternative logistics routes could render the Strait of Hormuz redundant within five years, citing investments to recover from the impact of the Iran conflict in the Gulf region.

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HSBC CEO says alternative routes could make Strait of Hormuz 'redundant' in five years

HSBC CEO says alternative routes could make Strait of Hormuz 'redundant' in five years

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