Strait of Hormuz in Limbo: Conflicting U.S.-Iran Signals Rattle Global Oil Markets

Strait of Hormuz in Limbo: Conflicting U.S.-Iran Signals Rattle Global Oil Markets

Contradictory statements from Washington and Tehran over the status of the Strait of Hormuz are deepening uncertainty around one of the world’s most critical oil transit chokepoints, with shipping data showing a sharp and unexplained drop in vessel traffic days after a ceasefire was announced.

Open or Closed? Depends Who You Ask

Iran’s military declared over the weekend that it would close the strait in response to Israeli strikes in Lebanon, which Tehran characterised as a violation of the ceasefire agreement. The U.S. flatly contradicted this, with U.S. Central Command stating that commercial ship travel through the waterway had actually increased on Saturday and that safe passage “remained intact.”

The duelling narratives leave shipowners, insurers, and energy traders with no reliable ground truth — a situation that, by itself, is sufficient to suppress traffic and push up risk premiums.

Vessel Data Tells an Ambiguous Story

Shipping tracker Vesseltracker recorded approximately 50 vessels entering the strait on Saturday the 20th. By the following day, that figure had fallen by roughly half.

“There is some uncertainty around what drove that drop,” said Christopher Aversano, director of maritime partnerships at Wood Mackenzie. “It is unclear whether vessels simply switched off their AIS tracking, or whether they held back due to Iran’s declaration that the Strait was closed.”

The distinction matters. Vessels disabling their automatic identification system (AIS) transponders suggests evasion rather than absence — a different risk profile from outright avoidance of the waterway.

A 60-Day Window, and a $300 Billion Bet

The current framework stems from a memorandum of understanding signed by the U.S. and Iran, giving both parties 60 days to reach a deal on Iran’s nuclear programme. The agreement includes an immediate waiver on U.S. sanctions on Iranian oil and the creation of a $300 billion reconstruction fund for Iran.

On Monday, the U.S. Treasury Department issued a 60-day “general licence” temporarily lifting restrictions on the sale of Iranian oil. Treasury Secretary Scott Bessent said on X that “Iran has committed to free and open transit in the Strait of Hormuz and to permit International Atomic Energy Agency (IAEA) inspectors into their country.”

The deal has drawn scepticism from critics of the Trump administration and from some of its own allies, who question whether Iran’s commitments are enforceable within the compressed timeframe.

Long-Term Governance of the Strait Remains Unresolved

The agreement includes a provision for Iran to “conduct dialogue” with neighbouring Oman to define the “future administration and maritime services” in the strait — language that defers rather than resolves the fundamental question of who controls the waterway.

“Everything’s unpredictable,” said Patrick De Haan, head of petroleum analysis at GasBuddy, when asked what shipping traffic would look like over the 60-day ceasefire period. The assessment was blunt, but it accurately captures the state of play.

Even before the latest closure declaration, analysts noted that restoring pre-conflict shipping volumes would take time regardless of the diplomatic outcome. The strait handles roughly 20 percent of global oil supply, making any prolonged ambiguity a systemic risk for energy markets worldwide.