Specialist S&P Global division Platts has gathered extensive feedback on the commercial reopening of the Strait of Hormuz. A complex picture emerges regarding the conditions that should be met for the market at large to consider the strait open for sustainable, consistent traffic. Here are the top five factors in its research.
1. Vessel traffic recovery
Market participants would need to converge around a minimum threshold of pre-war vessel traffic – reflecting both owned and chartered ships operated by a diverse set of international market participants, including oil majors, trading houses, and national oil companies – passing continually through the strait for a sustained period. Platts found market participants specified thresholds ranging from 50 to 90% of pre-war traffic, sustained for one week to up to one month. Meaningful recovery toward pre-war throughput is a critical indicator that confidence has returned across the supply chain, including charterers, shipowners, and cargo interests.
2. Observation period following ceasefire
Expectations shared indicate a minimum observation period following a declared ceasefire is required to verify that hostilities have genuinely ceased, that no intermittent disruptions persist, and that maritime traffic can return to normal without incident. Indications for an observation period ranged from 30 to 45 days. During this period, stranded vessels should be able to exit safely, while vessels waiting outside should begin re-entering in a consistent and orderly manner.
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3. Marine insurance availability
Marine insurance availability is considered a central determinant of normalcy. Feedback indicated that a broad pool of underwriters should be willing to provide war risk cover, not just a limited or highly selective group. Premiums may remain elevated relative to pre-conflict levels, but coverage should be accessible at commercially viable terms. A market with prohibitively expensive or limited coverage would not constitute normalisation. Premiums have skyrocketed between 5 to 10% of hull value compared with pre-war rates of under 0.25%.
4. Physical security conditions
Physical security should be demonstrably improved, including confirmation that naval mines or other navigational hazards have been cleared and that maritime security frameworks – such as naval patrols and convoy mechanisms, if applicable – function effectively to ensure safe passage, according to market feedback.
Physical security is at a critical juncture due to an ongoing blockade and conflict. Iran now enforces a highly selective, militarised transit protocol requiring commercial vessels to obtain permission from the Islamic Revolutionary Guard Corps Navy and travel only via designated routes.
5. Fleet deployment patterns
Visible return of large vessels into the Middle East Gulf, along with regular port calls and loading programmes, would signal restored confidence among shipowners and charterers. The scale and frequency of such deployments should align with pre-conflict norms or show a clear trajectory toward them. Key conditions include sustained traffic flow, adequate insurance coverage, restored throughput levels, confirmed navigational safety, and normalised vessel deployment. Between 800 and 1,500 ships are in ‘backlog’ or trapped in the Gulf region.
