By Vanessa Yurkevich, Chris Isidore, Matt Egan, CNN
New York (CNN) — A fragile ceasefire that’s mostly quieted the skies over the Middle East isn’t giving shippers the nerve to brave the narrow waterway that holds the key to 20% of the world’s oil supply.
The Strait of Hormuz may be officially re-opening for business, but shipping company executives and analysts told CNN uncertainty surrounding the ceasefire is still making transit too risky right now. Explicit approval and safety assurances from Iran, clear guidance on how and when to transit and a long-term view of the strait’s future are all so far missing, shippers told CNN.
Hapag-Lloyd, the fifth-largest shipping company in the world, has six container ships trapped in the strait, but it’s keeping them put for now.
“Our top priority is the safety of our employees on land and on sea. Based on our current risk assessment we are refraining from transiting the strait,” spokesman Nils Haupt said.
Word of a two-week ceasefire sent oil plunging and stocks soaring on Wednesday, a reflection of the strait’s importance to global commerce. That rally has given way to a reality check: Despite repeated assurances from President Donald Trump that the strait is open, only a few ships have made the journey in recent days. Oil, after notching double-digit declines, is again flirting with $100 a barrel.
Indeed, Lale Akoner, a global market analyst at financial services company eToro, told CNN it could take six months to get ship traffic back to where it was before the war began. More than 100 cargo-carrying vessels moved through the 21-mile-wide waterway daily before the conflict, according to shipping-data provider Lloyd’s List. That means the economic consequences of the war – higher energy costs and their varied knock-on effects – are likely to well outlast the fighting.
Here’s why: Shippers are hesitant to trust a ceasefire that’s already been shaky, especially without direction on which ships can go when. Just two oil or gas tankers have transited the Strait of Hormuz since the ceasefire was announced, according to Kpler, a data intelligence and analytics platform. Over 400 tankers, 34 LPG tankers and 19 LNG vessels remained in the region as of Wednesday, according to MarineTraffic data.
And ships don’t just need to get out – they also need to get in, so that they can load up stored-up oil that’s been trapped on land for weeks.
“Vessel operators believe it’s not worth taking the risk,” said Joe McMonigle, president of think tank Global Center for Energy Analysis and who lives in Saudi Arabia. “People are going to be extremely cautious about going back to normal.”
‘Temporary and conditional’
While other critical goods like fertilizer flow through the straight, oil is the number one priority.
“The ceasefire removes the worst-case scenario, but it’s temporary and conditional,” said eToro’s Akoner.
Behind the scenes shipping companies are trying to figure out how to get their ships out of the Persian Gulf safely.
Shipping executives say they have “no information” on how to transit the strait during the ceasefire and are not in contact with Iranian authorities, according to Sanne Manders, president of Flexport, a global shipping logistics company.
Shipping experts say Iran is still in charge of the strait – and those authorities haven’t laid out a plan for