The months-long closure of the Strait of Hormuz—and with it, one-fifth of the world’s daily oil supply—was a big reason US President Donald Trump was eager to sue for peace with Iran.
But when 14 points memorandum of understanding that both signatories include language regarding the reopening of the strait and the resumption of pre-war shipping traffic, the language is not very clear. It is not yet clear when regular transport in one of the world’s most important hubs will resume, and the risk remains high: Oil prices have fallen sharply during the war, but they are sticking to likely to remain so like inventory goes down and tankers go.
The months-long closure of the Strait of Hormuz—and with it, one-fifth of the world’s daily oil supply—was a big reason US President Donald Trump was eager to sue for peace with Iran.
But when 14 points memorandum of understanding that both signatories include language regarding the reopening of the strait and the resumption of pre-war shipping traffic, the language is not very clear. It is not yet clear when regular transport in one of the world’s most important hubs will resume, and the risk remains high: Oil prices have fallen sharply during the war, but they are sticking to likely to remain so like inventory goes down and tankers go.
Start with The MOU itself. There are two main clauses that deal with shipping problems. Important is Article 5, which states that upon the signing of the MOU, Iran “will make arrangements using its best efforts to pass commercial vessels free of charge for 60 days only.” Then it starts to get confusing.
“Transportation of commercial vessels will begin immediately, and taking into account the need to remove technical and military obstacles and de-nuclearization by the Islamic Republic of Iran, it will be established within 30 days,” the article continues.
And what will be the government of the future traffic in the narrow? The Trump administration has always insisted that Hormuz will return to full freedom and transparency, while Tehran has already established the whole body to manage travel fees, with the intention of making clear a piece of the income of the Islamic Revolutionary Guard Corps. But that is not what the MOU says.
“Iran will negotiate with the Sultanate of Oman to define the future governance and maritime services in the Strait of Hormuz in consultation with other Persian Gulf states in accordance with applicable international law and the sovereign rights of the coastal states of the Strait of Hormuz,” Article 5 concludes.
This seems to suggest that any mine-clearing operations—and major shipping companies believe that Iran scattered some mines in the main channel of Hormuz—are up to Iran, although the United States and the United States. European countries be able to clean the mine. The MOU also seems to suggest that the mine permit is a month’s work, which the US Department of Defense told Congress it could take. six months.
The MOU also appears to suggest that Iran will allow free passage of Hormuz during 60 days of compliance talks but after that it may seek to create a novel and alternative transit regime. Those two issues – mines and fines – are what the big exporters have worked on.
“The middle part of the strait is mined and impassable, and only the maritime traffic areas near Oman and Iran are reported to be mine-free,” Jakob Larsen, chief safety and security officer at the International Baltic Sea Council and Bimco, said in a statement on June 18. to begin transit at this time.
Intertanko “wants urgent clarification on practical measures needed to support the safe passage of ships through the Strait of Hormuz,” the International Tanker Owners Association said in a June 18 release. While the group welcomed the US-Iran agreement, it added that “ship owners need certainty about practical measures to ensure the safety of navigation and the safety of seafarers.”
The future of transit through the strait—whether it returns to a truly free route or whether Iran establishes some sort of route. toll booth after all – it is another concern of big exporters.
“Article 5 of the MoU states that no tariffs will be imposed for the first 60 days; however, the future is unclear and will be decided by Iran following talks with Oman and discussions with the Gulf states,” Phillip Belcher, Intertanko’s maritime director, said in the same release. “The final result of these discussions must be the strengthening of the main principle that the Strait of Hormuz must remain free and open to all in accordance with” the United Nations Convention on the Law of the Sea.
If the Law of the Sea (which neither the US nor Iran ratified) is the last word, or even the first. 1958 Geneva Conventions ok, then answer it seems very clear.
“When you have a narrow waterway, it’s an international channel, and everyone should be able to pass without any hindrance,” said Kristina Siig, an expert in maritime law at Aalborg University in Denmark. “Coast states can set regulations but there are no fees,” he said, recalling that Denmark withdraw of tolls in the Denmark Strait in the mid-19th century, long before international treaties made it mandatory. (He noted that the same prohibitions apply to the Trump administration reported plans charging a fee in a fast, escorted way through Hormuz. “No, no, no, no, it’s not legal,” he said.)
All told, some traffic was already entering, exiting, and going through the Strait of Hormuz even before the MOU was signed.
On Wednesday, some 26 ships crossed the strait, with traffic evenly split between inbound and outbound trips, according to The winda maritime intelligence company. In fact, only about a third of those ships were oil tankers, and that number still represents a fraction of the pre-war traffic in Hormuz, but it is busier than at almost any time since the first days of the war. (The other two-thirds were a mix of cargo ships and bulk carriers.)
There are other indicators, too. Saudi oil tankers have done just that is reported shown offline, taking oil from storage to customers in Asia. Qatari tankers built to carry liquefied natural gas ship back to the Persian Gulf to load and resume exports after several months of ceasefire. And Iranian oil tankers, which have repeatedly slipped through US blockades, are now free to do so continue to do so, along with the US military to announce on Thursday that the restriction has been lifted.
But for traffic to resume at any pre-war levels, when more than 100 ships would pass through the channel each day, shipowners insist that the most important thing is to restore full confidence in the normal, two-lane, deep-water channel in the middle of the channel, rather than relying on the narrow, treacherous and restricted traffic lanes that currently serve as Persian safety lanes. Gulf. (“If 550 ships aim to leave and possibly 60 ships a day would look to pass through the Strait of Hormuz, then the existing channels are not enough to handle this,” Intertanko noted.)
“Vessels trapped in the Persian Gulf will be willing to leave as soon as it is safe to do so, but this must be done in a coordinated manner due to the limitations of the sea,” Bimco’s Larsen said in a statement Thursday.
