Despite a reported two-week ceasefire agreement between the US and Iran, contingent upon reopening the Strait of Hormuz, the strategic waterway remains effectively closed, severely disrupting global energy shipments.

Ceasefire Fails to Restore Transit

Shipping traffic through the strait has declined further since the ceasefire announcement, with vessel crossings dropping from 11 to 5 in a single day. The chief executive of the Abu Dhabi National Oil Company (Adnoc) has stated that access is being "restricted, conditioned and controlled," arguing that conditional passage is not true passage and that the strait must be opened fully and unconditionally.

Weaponization and Global Consequences

Iran's actions are characterized as using the strait for political leverage and coercion, which constitutes a dangerous "weaponisation" of a vital trade corridor. This sets a perilous precedent that undermines the fundamental principle of freedom of navigation, threatening global trade and economic stability. An estimated 230 vessels loaded with oil are currently waiting to sail, and no single country has the legitimate right to control access.

Economic and Market Urgency

The closure has direct and urgent economic impacts. More than 20% of global energy flows, including oil and LNG, transit the strait, and its reopening is critical to rebalance markets and ease pressure on prices and the cost of living. This is especially pressing for Asia, the destination for 80% of these cargoes and home to half the world's population. Adnoc, while committed to fulfilling customer contracts and expanding production within the limits of its own damage, emphasizes that vessel and crew safety is paramount.