Shock Surge at Hormuz: How Lng Transit Defied the Start of the Us-Iran War

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While LNG carriers sustained traffic through Hormuz, crude oil operators adopted a more cautious approach. Major independent tanker owners redirected millions of barrels around Africa via the Cape of Good Hope, adding 10 to 14 days of sailing time and consuming thousands of tons of heavy fuel oil per trip. This divergence created a two-speed shipping environment across the Middle East.

The Cape diversion stretched global supertanker capacity thin, driving Very Large Crude Carrier (VLCC) day rates past $110,000 per day on key routes. European refiners, already cut off from Russian pipeline crude and facing Middle Eastern delivery delays, competed directly with Asian refineries for West African and US Gulf Coast light sweet crude.

This operational split split commodity market behavior:

• Natural Gas: Heavy Asian spot demand and stable Qatari export schedules stabilized Asian LNG prices between $13.50 and $15.20 per MMBtu, avoiding the runaway spikes seen during early 2022.
• Crude Oil: Cape rerouting and selective tanker attacks kept Brent fluctuating within an elevated band of $88 to $96 per barrel, sustaining elevated retail gasoline and diesel prices worldwide.
• Maritime Insurance: Premium surcharges expanded past the Persian Gulf into the Gulf of Oman, raising transportation overhead for all regional cargo.