Traffic through the Strait of Hormuz, a vital maritime route responsible for nearly 20 percent of the world’s oil shipments before the outbreak of conflict on February 28, remains significantly reduced despite a ceasefire agreement signed on June 17. The waterway has garnered intense attention amid ongoing tensions linked to the U.S.-Israeli conflict involving Iran.
On Wednesday, maritime intelligence firm Kpler reported only 25 tankers transiting the strait in both directions, a sharp decline from 49 tankers the previous day. While a complete closure of the strait is not anticipated by market observers, the diminished activity reflects persistent concerns over potential supply disruptions. Analysts caution that any extended interruption in Gulf oil exports or closure of the strait could drive energy prices higher.
The instability surrounding the Strait of Hormuz has spurred increased interest in diversifying oil export routes, particularly in Canada. The Alberta government recently advanced plans for a multibillion-dollar pipeline project aimed at reaching the West Coast, seeking to reduce reliance on Persian Gulf supplies. Meanwhile, the expanded Trans Mountain pipeline has operated at full capacity for the first time since its completion, as refiners in the Asia-Pacific region have turned to Canadian crude to offset constrained imports from the Gulf.
Despite these short-term disruptions, many market experts expect the current flare in conflict to be temporary. Following an initial spike, oil prices have stabilized near US$72 per barrel. Forecasts suggest a global oil surplus may persist through 2028, which could contribute to price declines once shipping through the Strait of Hormuz returns to normal levels.