As US President Donald Trump moves to reopen the Strait of Hormuz through a peace deal with Iran, major shipping companies such as Maersk are likely to stop short of resuming normal operations in the near term amid lingering concerns about the waterway’s security and the durability of the agreement, according to observers.
Some industry insiders said the deal’s impact on the global shipping industry would hinge on whether the United States extended sanctions relief beyond the initial agreement, as well as on sustained efforts to clear mines from the strategic waterway.
Washington and Tehran announced a framework accord earlier this week, suspending hostilities and giving both sides 60 days to negotiate a settlement on some of the main points of contention in the relationship – including Iran’s nuclear programme. But while Danish shipping giant Maersk welcomed the development, it cautioned that it was still too early to gauge its implications for regional logistics and maritime operations.
“At this stage, there are no changes to our operations in the Middle East,” the company told the South China Morning Post on Wednesday.
American and Iranian officials are expected to sign a memorandum of understanding in Switzerland on Friday aimed at ending the conflict and reopening the Strait of Hormuz, after shipping has been at a near standstill since the US and Israel launched military strikes on Iran in late February.
The strait serves as a critical artery of global trade and, before the conflict, carried about one-fifth of the world’s seaborne oil and liquefied natural gas, as well as critical agricultural inputs such as urea.
Although the agreement promises to restore commercial shipping and ease some restrictions on Iran, analysts said the industry was likely to adopt a wait-and-see approach.
“Even if the US-Iran agreement is ultimately implemented, major shipping companies are unlikely to immediately downgrade the Strait of Hormuz from a high-risk zone to a normal trade route,” said Winsome Wang, Greater China regional manager at Veson Nautical, a maritime software and data provider.
Companies involved in Iranian oil and shipping could benefit if Washington were to ease sanctions further, Wang said. But the extent of the gains, he added, would depend on whether broader compliance restrictions – including secondary sanctions and requirements involving banks, insurers and classification societies – were also relaxed.
“The shipping industry places greater emphasis on actual navigational safety, mine-clearance progress, insurance premiums and whether shipowners, charterers, banks and insurers genuinely regain confidence,” he said.
“As a result, the market is more likely to move from pricing in extreme risk towards a cautious recovery, rather than an immediate return to normality.”
Data from Veson Nautical showed disruptions in the Strait of Hormuz have significantly reshaped trade flows. Charter rates for very large crude carriers have surged 138 per cent from a year earlier, while China’s liquefied petroleum gas imports have fallen 22.1 per cent so far this year.
In its latest assessment, global credit rating agency Fitch Ratings said the proposed US-Iran deal could ease some of the conflict’s most acute risks, but warned that uncertainty persisted over whether it would be signed and implemented and whether it could deliver lasting stability to the region.
Like Maersk, Norway-based shipping group Wallenius Wilhelmsen and Japan’s Mitsui O.S.K. Lines warned it would take time for normal shipping patterns to resume. German container shipping group Hapag-Lloyd, meanwhile, said it hoped to resume operations through the strait this week.
The latest vessel-tracking data from MarineTraffic showed no sign of large numbers of ships rushing back to the Strait of Hormuz following the announcement of the framework agreement. -- SOUTH CHINA MORNING POST
