Freight markets remain cautious despite the announced reopening of the Strait of Hormuz, with shipowners seeking stronger security assurances before returning vessels to the region, Argus Media said Monday.
Market participants continue to question whether traffic through the strait can sustain a meaningful recovery, citing repeated false starts surrounding earlier ceasefire and reopening announcements, Sheel Bhattacharjee, head of freight pricing at Argus, said.
The Indian LNG tanker Disha completed a transit near Iran's Larak Island without incident, while several smaller vessels also crossed the waterway, although movements remained consistent with recent traffic levels, Bhattacharjee said.
No significant crude oil or clean products tanker movements occurred overnight, with market participants remaining doubtful that a "sustained and meaningful return of ships through the strait" will happen anytime soon, Bhattacharjee added.
Shipowners have adapted to the absence of Middle East Gulf cargoes by developing alternative trade routes and earning strong returns elsewhere, reducing incentives to seek any "first-mover advantage" in the region.
If freight rates remain unattractive, "shipowners will simply remain in lower-risk regions out of the Mideast Gulf." However, a sustained recovery in Gulf cargo volumes could eventually support higher freight rates, Bhattacharjee said.
Bhattacharjee added that a gradual return of vessels remains possible if cargo flows resume and security conditions stabilize, although any recovery is expected to be "measured rather than immediate."
Governments and maritime organizations must provide clearer security assurances to restore confidence, while freight rates in the Strait of Hormuz could gradually realign with those in the Gulf of Oman if the peace agreement holds, according to Bhattacharjee.
Insurance costs are also unlikely to ease until large fleet operators resume regular transits through the strait. Even then, security threats from the Houthis and concerns over mines could slow normalization, Bhattacharjee said.
Security risks have increasingly affected commercial shipping, with the UK Maritime Trade Operations recording 57 incidents involving vessels operating in the Middle East Gulf, Strait of Hormuz and Gulf of Oman between Feb. 28 and June 11, Bhattacharjee said.