Vessels to and from India among top applicants for Strait of Hormuz passage

The share of the rest of Asia was 29%, while that for intra-region (in the Persian Gulf) movements was 22%. The share of the rest of the world was 8%.

To enter the Persian Gulf, of all transit requests, India topped the list of origins with a 21% share, followed by China at 19%. Other Asian countries had a combined share of 20%, intra-region movement requests accounted for 24%, while the rest of the world had a share of 16%.

The PGSA didn’t provide the absolute number of transit requests received. This data also doesn’t include vessels that crossed or attempted to cross the strait without seeking Tehran’s permission.

Source: Persian Gulf Strait Authority

Post these three weeks after the MoU, tensions resurfaced in the region, leading to a significant drop in maritime traffic. While vessel movements have not completely stopped, they are sharply down following the resurgence of conflict around the critical trade artery. On its part, Iran and the PGSA maintain that the strait is closed.

The data is in line with trade patterns considering India and China have traditionally been the major destination for cargo, particularly energy shipments, exiting the strait, with the rest of Asia making up a bulk of the remaining traffic.

Around 40% of India’s crude oil imports, 60% of its LNG imports, and a whopping 90% of its LPG imports came from West Asia through the strait. The country’s dependence on imports stands at over 88% for oil, 60% for LPG, and about 50% for natural gas, which is imported as LNG.

Before the war broke out late February, the Strait of Hormuz usually accounted for a fifth of global oil and LNG flows. Given the high dependence on West Asia for energy and other imports like fertilisers, it was expected that vessel traffic between India and the Persian Gulf would pick up.

What is now playing out in the Strait of Hormuz is a battle between Iran and the US to effectively control the waterway. The US and its allies have been encouraging vessels to use the strait’s waters hugging Oman as an alternative to Tehran-designated lanes.

The stark differences in the MoU’s interpretation and the vagueness in its terms have now emerged as the flashpoints between Tehran and Washington. Maritime data shows that ever since last week’s fare-up, which followed Iran’s targeting of a few vessels taking the Omani route through the strait, even the vessels crossing the strait are mostly doing so using paths designated by Iran.

During the war, Iran actively regulated the flow of vessels through the strait, allowing only a handful to pass, that too using routings dictated by it. Following the June MoU with the US, Iran continued to insist that vessels cross the strait only through the routings designated by it, and that too after seeking permission from the PGSA. Tehran also plans to impose a service fee for transits, but at a later date.

Earlier this week, US president Donald Trump even proposed a 20% charge by the US Navy to facilitate safe passage of commercial ships through the strait, only to backtrack the very next day.

According to the data released by the PGSA, of the 200-plus transit applications it received in the three weeks following the MoU, 53% were for exiting the Persian Gulf, while 47% were to enter the Gulf. The PGSA said that it approved 79% of the applications, while 14% were under process as of July 14. It said that the average time taken to process the transit applications was 50 hours. As for requests by type of vessels, tankers had the highest share at 41%, followed by bulk carriers at 27%. Container ships, LNG carriers, and service vessels accounted for 18%, 2%, and 1%, respectively, with other vessel types accounting for an 11% share.

According to vessel tracking data from commodity market analytics firm Kpler, there were just 14 vessel crossings on Sunday (July 12), down from 24 on July 11 and 19 on July 10. As per data from S&P Global, the last time ship transits were lower than this level was on June 14, three days before the US and Iran inked their peace deal MoU.

There are reports that transits have grown slightly over the past three days, but most pertain to Iran-linked vessels. Since mid-June, vessel movements through the strait had risen meaningfully, even crossing 90 on June 24, with the average being between 40 and 50 on most days in the three weeks that followed the MoU, industry data shows. But these were still lower than the pre-war levels of up to 140 daily transits.