Iran war: Will tensions escalate in the Strait of Hormuz?

Is a secure escort of tankers and merchant ships by US forces in the Strait of Hormuz possible? DW has compiled the most important questions and answers regarding the transport of oil and gas shipments through the waterway, which connects the Gulf with the Arabian Sea.

What do we know about "Project Freedom"?

According to the US Central Command (CENTCOM), "Project Freedom" will deploy more than 100 land and sea-based aircraft as well as 15,000 service members.

he idea is to coordinate efforts to help commercial vessels navigate the Strait of Hormuz. The project does not call for the US Navy to offer protection by escorting ships through the waterway.

According to the Lloyd's Market Association (LMA)— an association of about 100 companies that collectively underwrite risks for ships and oil platforms — a total of around 1,000 ships are currently affected by the blockade around the Strait of Hormuz. Approximately 20,000 crew members are stuck on the ships. At least 25 vessels have been hit by gunfire since late February when the Iran war began.

According to Lloyd's reports, there was no prior consultation with the industry by the US government regarding how the ships stranded in the Middle East would be safely guided out of the waterway.

Are ships still operating in the Strait of Hormuz?

Yes, although traffic has fallen to a minimum and frequently comes to a standstill. Between 125 and 140 ships passed through the strait daily prior to February 28 when the US-Israel war on Iran began. On April 30, only  seven ships  had passed through in the past day, according to data from commodities analyst Kpler.

Currently, the strait is being blocked by both Iran and the United States. The blockade imposed by Iran since February 28 is aimed at reducing maritime traffic overall. According to the Israeli maritime intelligence firm Windward, which monitors international shipping traffic, all vessels wanting to pass through the strait have to coordinate with Iranian authorities and oil tankers have topay a toll of $1 per barrel transported.

The US blockade of the strait, which began on April 13, targets ships entering and leaving Iranian ports. According to Windward, the blockade has led to a sharp decline in Iranian crude oil exports to Asia.

The international shipping association BIMCO has urged "all parties of the conflict to show restraint and help protect innocent seafarers."

In answer to the question of what the shipping industry needed to resume transits, it said: "For most shipping companies, they will need a stable ceasefire and assurances from both sides of the conflict that the Strait of Hormuz is safe to transit," the association said in a statement, adding that also the threat of mines is of particular concern.

US gas prices soar as Iran standoff fuels oil market fears

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Have the costs of insuring ships risen?

Yes, the Iran war has driven up the cost of insuring shipping through the Strait of Hormuz significantly. However, according to the German Insurance Association (GDV), it is still possible to insure ships.

"The usual market mechanism is at work in the face of increased risk of war," said Jörg Asmussen, GDV's chief executive.

However, according to agency reports, several major marine insurers have already suspended their war-risk coverage for the region around Iran and the Persian Gulf since March 5, or have stopped offering new policies in the area. These include the insurers Gard, Skuld, NorthStandard, the London P&I Club, the American Club, and the Japanese group MS&AD Insurance.

Why is the Strait of Hormuz important?

The Strait of Hormuz connects the Persian Gulf in the west with the Gulf of Oman in the east and provides access to the Arabian Sea. OPEC members such as Saudi Arabia, Iran, the United Arab Emirates (UAE), Kuwait, and Iraq export most of their crude oil through this strategic chokepoint.

In 2024, an average of about 20 million barrels of crude oil passed through the strait daily — nearly 20% of global consumption. Qatar, one of the world's largest exporters of liquefied natural gas (LNG), ships nearly all of its LNG via this route. In total, about one-fifth of global LNG trade passes through the strait.

Which countries are affected by the blockade?

The effective blockade of the Strait of Hormuz is affecting countries in the Persian Gulf to varying degrees. While Saudi Arabia, the United Arab Emirates, and Iran have some alternative routes available, this is not the case for Iraq, Kuwait, Qatar, and Bahrain.

Iran can also use the port of Jask, which is located in the Gulf of Oman and has direct access to the Arabian Sea. Tankers, therefore, not have to pass through the Strait of Hormuz. 

Has the US military already escorted vessels in the Strait of Hormuz?

Yes, in 1987, during the Iran-Iraq War (1980–1988), Kuwait requested US escort for its oil tankers. In what had became known as the tanker war, both Iran and Iraq had attacked hundreds of tankers in the Persian Gulf and the Strait of Hormuz. The US registered several Kuwaiti oil tankers under its flag.

Around 60% of the vessels attacked during the tanker war were oil tankers. According to an analysis by the Robert Strauss Center for International Security and Law, 55 of the 239 oil tankers (23%) were completely sunk or declared lost.

The tanker war led to a 25% decline in merchant shipping. But the price of crude oil rose only temporarily because Iran lowered the price of oil to offset higher insurance premiums for shipments.

Strait of Hormuz and the global fight over shipping lanes

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This article was originally published in German.