Hundreds of large vessels are stranded in the Strait of Hormuz, insurance surges to $1.5 million, and the global oil market is unlikely to normalize before August.

(1) As of Tuesday, there are still 57 fully loaded supertankers stranded around the Strait of Hormuz, a figure that has only slightly declined since the early days of the conflict. Analysts at energy intelligence firm Kpler noted that transport through the strait is currently “just a trickle.” Even when including vessels with their location signals turned off, only about four ships passed through over the weekend, carrying small amounts of fuel rather than crude oil, half of which were linked to Iran. In essence, the Strait of Hormuz remains largely closed. (2) Each supertanker can efficiently and relatively cheaply carry around 2 million barrels of crude oil, and there are only about 950 in operation worldwide. The stranded vessels are exacerbating global anxieties over decreasing crude inventory. As import-dependent countries seek to diversify their Middle Eastern supply sources, some supertankers have already been redeployed to other, longer routes, and it may take time for them to return to the region. (3) Regarding insurance rates, before the outbreak of the Iran conflict, each supertanker voyage cost roughly $300,000. After the conflict, the peak reached around $4 million, and currently still stands at about $1.5 million. Vessels with higher risk premiums, such as those owned by or linked to certain countries, may face even higher insurance rates. Meanwhile, supertanker time charter rates spiked to $500,000 per day at the start of the conflict and have recently dropped to about $100,000 per day, but this is still significantly higher than the $35,000–$40,000 per day seen in May 2025. (4) Kpler’s base scenario predicts that the closure of the Strait of Hormuz will last through July and August, and normal passage will not resume until the end of the year. Safety considerations are now the primary factor for shipowners, and after finally withdrawing their vessels, some may be reluctant to send them back to such a volatile area. Bloomberg Intelligence analysts said they do not expect the tanker market to normalize soon; this conflict and the experience with the Russia–Ukraine conflict show how easily market order can be disrupted. (5) Even if the strait eventually reopens, supertankers may not return to the Middle East in the same numbers. Saudi Arabia is redirecting some crude oil through pipelines to Red Sea ports and may not fully resume exporting most of its crude via the strait. One analyst noted that just restoring Middle Eastern crude production to any normal level will take three to four months, while returning to pre-conflict levels may require six months to a year or even longer, with some shipowners likely to adopt a wait-and-see approach.