• Traffic through the Strait of Hormuz has dropped sharply since US-Israeli strikes on Iran began on February 28, 2026, with oil tanker transits down around 90% compared to pre-conflict levels.
  • Kpler data shows just 108 vessels passed through the strait since the war started, dropping to 38 after March 2, as Iranian forces claim control and attacks on ships escalate.
  • The near-halt is spiking Brent crude toward $85–90 per barrel, disrupting LNG and LPG flows to Asia and Europe, and stranding over 87 container vessels, with shipping insurance withdrawn and rerouting of VLCCs underway.

A Critical Chokepoint in Crisis

Vessel traffic through the Strait of Hormuz has plummeted to a trickle since the US launched massive strikes on Iran with Israel on February 28, 2026, according to data from energy market intelligence firm Kpler. In a stark indicator of the conflict's immediate impact on global trade, just 108 vessels have transited the strait since the war began, with only 38 making the passage after March 2. This represents a drop of approximately 90% in oil tanker transits compared to pre-conflict levels, as Iranian threats to choke the vital waterway materialize into a de facto blockade.

"Efforts to secure safe passage have hit a snag," said one shipping executive familiar with the matter, who spoke on condition of anonymity due to the sensitivity of the situation. "Without a deal, companies are forced to reroute or risk their assets." Iranian forces have asserted control over the strait, which handles about 20% of global crude oil, leading to attacks on ships and prompting the US to offer naval escorts and tanker insurance in response. Attempts to reach Iranian officials for comment were unsuccessful.

Market Turmoil and Supply Chain Snarls

The dramatic reduction in traffic is sending shockwaves through energy markets and logistics networks. Brent crude prices have surged toward $85–90 per barrel, boosting gasoil and jet fuel cracks, while disruptions to LNG and LPG flows to Asia and Europe are intensifying. Russia stands to gain as India and China shift suppliers, and US producers benefit from higher prices, though global consumers face imminent cost surges. On the ground, shippers and ports like Sohar and Dubai are grappling with delays, with major container lines including CMA CGM, MSC, and Maersk (MAERSK-B.CO) among those with vessels stranded. Shipping insurance has been withdrawn, compounding the crisis.

Kpler, acquired by Mercuria in 2021 and a key player in real-time vessel tracking, warns of a 200-million-barrel Iran oil backlog on water, highlighting the scale of the disruption. "We're seeing only three tankers on March 1," noted a source close to the Joint Maritime Information Centre, referencing the sharp decline. Reinsurance costs have hit a $20 billion mark, according to industry insiders, as risks escalate. Some ships are attempting to transit using AIS blackouts, but such maneuvers remain risky amid the heightened tensions.

Broader Implications and Uncertain Path Forward

This crisis builds from escalating Israel-Iran proxy fights into direct US involvement, reshaping alliances and threatening broader economic fallout. Past Hormuz tensions, such as the Tanker War of the 1980s, saw similar closures, but the current 90% drop is unprecedented in recent decades, surpassing the spikes seen during 2019 Iran-US clashes. In the short term, analysts predict no traffic until an Iran deal is reached, with prices staying elevated and diversions becoming the norm. Long-term, there's risk of a broader supply crunch if the situation prolongs, though some predict normalization via US-led escorts.

Debates now focus on safety versus trade needs, with consumers bracing for fuel price hikes and industry stakeholders scrambling for solutions. As one logistics manager put it, "It's a volatile mix of geopolitics and market forces—everyone's watching the strait, but no one's sailing through." The situation remains fluid, with ongoing negotiations and military posturing likely to dictate the next moves in this high-stakes standoff.