Hormuz and Bab el-Mandeb transits collapse as Gulf energy flows dry up
Shipping through the two chokepoints at either end of the Arabian Peninsula has fallen to a fraction of normal levels, with the disruption that began in the Gulf now spreading firmly into the Red Sea. Vessels transiting Bab el-Mandeb averaged 31 a day across 25 and 26 July, down by around half against the second-quarter average in tonnage terms. Crossings through the Strait of Hormuz stood at 13 transits a day over the weekend, down 90% against pre-conflict levels, with the fall in tonnage terms exceeding 95%.
The tanker figures are starker still. Very large crude carriers crossing Bab el-Mandeb averaged one a day over the past week, down from three a day in the second quarter. Through Hormuz, six such transits were reported over the week, a fall of roughly 95% against typical levels. Around 1m barrels a day of crude left the Gulf over the same period, against 10m barrels a day in early July and 15m before the conflict, and no LNG carriers or very large gas carriers appear to have passed through the strait in more than ten days.
Freight markets have moved accordingly. Earnings for very large crude carriers firmed 13% in a week to $145,000 a day, while very large gas carrier spot earnings rose 24% week on week to $172,000 a day, now around 10% below the record set in May. Rates at those levels reflect the removal of a substantial share of available tonnage from effective circulation rather than a surge in demand, since ships waiting outside a closed corridor are not earning but are also not competing for cargo.
Sustained avoidance of Bab el-Mandeb would lengthen voyages considerably. Flows through Yanbu, which exported 3.8m barrels a day over the past week, some 3m above normal, would have to be rerouted, and Yanbu to China via the Suez Canal and the Cape of Good Hope is roughly 15,000 nautical miles, twice the 6,700 nautical miles currently sailed via the Gulf of Aden. Longer-term planning to reduce reliance on Hormuz continues, with bypass pipeline export capacity potentially rising from 8m barrels a day today to 17m if every project is built, though those routes generally imply longer sea legs as well.
There are tentative signs of recovery at the southern end. Vessels passing Bab el-Mandeb rose to 28 on 27 July, a four-day high, though still below the month's peak of 46 recorded on 14 July. Of twelve vessels entering the Red Sea that day four were tankers, while ten of the sixteen that exited were tankers. The Hong Kong-flagged very large crude carrier New Pearl left for Zhoushan with two million barrels of Saudi crude, the fourth Chinese supertanker to depart since the Houthis declared a naval blockade. Hormuz stayed quiet, with six commodity-carrying vessels transiting on 27 July, among them a very large crude carrier that entered with its transponder switched off.
