“For Europe, diesel and jet fuel are likely to become major issues in the next couple of months,” Wright said. “There is simply no alternative route for much of that supply.”
Major container carriers including Maersk, MSC, Hapag-Lloyd and CMA CGM have already halted transits through the strait, rerouting vessels or sending them to safe anchorages.
Insurance has also become another major constraint. War-risk coverage was briefly withdrawn and is now returning only at sharply higher costs, with some hull and cargo premiums rising 200 to 300 percent.
“In the 15 years I’ve covered oil and shipping markets, this is probably the biggest event,” he said in an interview earlier this month, comparing the shock to the early months of the Covid-19 pandemic and the start of the Russia-Ukraine war.
Even an immediate ceasefire would not quickly restore shipping through the strait, Wright said.
“If the U.S. announced today that the war was over, that could almost make things worse,” he noted. “How do you define the end of the war? If the U.S. simply pulls out or says military action is complete, that wouldn’t solve anything. Iran would still be capable of firing into the Strait of Hormuz, and that uncertainty would add even more risk to the market.”
Nektaria Stamouli contributed to this report.