MARKET STRUCTURE · GLOBAL
Iran closes parts of Strait of Hormuz for hours
The Hindu
18 Feb · 11:56 AM
Change
Iranian media reported parts of the Strait of Hormuz were closed for a few hours on February 17 for security precautions as Revolutionary Guards drills were broadcast.
Why it matters
A temporary closure in the Strait of Hormuz can disrupt vessel sequencing, port call timing, and charter-party performance even if the window is measured in hours. Any interruption at this chokepoint can quickly translate into higher spot freight rates and war-risk premiums for tankers and LNG carriers transiting the Gulf. The broadcast of IRGC drills signals an elevated security posture that can trigger tighter company risk controls and additional compliance checks by counterparties. The event also increases the probability of knock-on delays at loading terminals if traffic management backlogs form during the closure window.
Implications
- • Higher war-risk premiums and insurance scrutiny for Gulf transits
- • Potential demurrage and schedule slippage from traffic backlogs
- • Short-term volatility in spot tanker/LNG freight rates
- • Increased counterparty compliance checks for shipments via Hormuz
Who is affected
- • Oil and LNG shippers and charterers using Gulf export routes
- • Tanker and LNG carrier operators transiting the Strait of Hormuz
- • Marine insurers and P&I clubs underwriting Gulf voyages
- • Refiners and commodity traders dependent on Gulf cargo timing
Source
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