Strait of Hormuz Remains Open Despite Iranian Attacks

The Strait of Hormuz has been one of the world's most treacherous waterways since March, when Iran began attacking shipping vessels as a pressure tactic in its ceasefire talks with the United States. Despite this, a significant proportion of global oil trade continues to pass through the strait. According to data from Global Fishing Watch, at least 84 ships crossed the Strait of Hormuz between February and July, with 34 moving into the Persian Gulf and 50 leaving it.

Of these vessels, only nine were Iranian- or Pakistani-owned, while the rest flew flags from various countries, including the United Arab Emirates. The UAE's Abu Dhabi Crude Oil Pipeline (ADCOP) runs parallel to the waterway, and 13 of its cargo ships, along with two LPG tankers and three support vessels, transited the strait during the conflict.

The primary motive for continuing to move oil through the Strait of Hormuz is financial. 'Simply because the reward seems higher than the risk,' said Matt Smith, director of commodity research at Kpler. The key point is that producers within the Strait of Hormuz have only two options: halt production and earn no money or accept the risk and earn 90% of their normal revenue.

The Brent Crude oil price has been on an upward trend since hostilities resumed in July, perhaps one of the most perceivable global effects of the war. Alternative routes have limited capacity to compensate for the loss of oil flow through the strait, according to the International Energy Agency (IEA).