While ship traffic in the Strait of Hormuz has increased after the ceasefire, oil transportation costs have fallen sharply
According to the UK Shipping Organisation, commercial shipping traffic in the Strait of Hormuz increased by 4% on a weekly basis following the ceasefire between Iran and Israel.
- Published July 2, 2025 14:11
Following the ceasefire between Iran and Israel last week, commercial ship traffic in the Strait of Hormuz has increased on a weekly basis, while the cost of transporting crude oil and petroleum products has fallen sharply.
The Strait of Hormuz, which is strategic for global trade, has become a focal point during the 12-day conflict that began with Israel’s attacks on Iran. Concerns that Iran could close the Strait of Hormuz, thus disrupting oil and liquefied natural gas (LNG) trade through the Strait, have led to sharp increases in prices and transportation costs.
There was no significant decrease in commercial ship traffic in the Strait of Hormuz during the 12-day conflict between the two countries, but concerns about passage through the Strait have eased following the declaration of a ceasefire on June 24.
The UK Maritime Trade Organisation (UKMTO) described the threat level in the region as “significant” in its assessment of the Middle East covering the week of June 23-29, but announced that commercial shipping traffic in the Strait of Hormuz had returned to normal and that there was no threat to shipping. The institution reported that strengthening the ceasefire agreement would reduce maritime tensions in the Persian Gulf.
According to information compiled by AA correspondent from UKMTO data, 885 ships passed through the Strait of Hormuz in the week of June 23-29. This figure was 4 percent higher than the passages in the week of June 16-22, when clashes between Iran and Israel continued.
On the other hand, more than 900 commercial ships used the Strait of Hormuz in the week of June 8-15, which included the period before Israel's attacks on Iran.
Information obtained from real-time tracking platform MarineTraffic also confirmed that commercial ship traffic continued in both directions in the Strait of Hormuz during the conflict between Israel and Iran, and that crossings showed a moderate increase after the ceasefire.
Accordingly, while 88 ships passed through the Strait of Hormuz daily on June 12, the day before Israel's attacks on Iran, and 103 on June 13, this number dropped to 85 on June 17, the lowest level in the 12-day conflict period.
On June 24, when the ceasefire between Iran and Israel was declared, the number of commercial ships using the Strait of Hormuz increased to 110 per day.
Oil transportation costs have fallen
During the conflict, the cost of transporting crude oil and petroleum products through the Strait increased sharply due to concerns that the Strait could be closed and tanker operators were cautious about transiting through the Strait. Transportation costs, especially on the Middle East-China and Middle East-Japan routes, increased because a large portion of the oil and petroleum products passing through the Strait were transported to Asian countries.
According to “LSEG Shipping Insights” data obtained by AA correspondent from London Stock Exchange (LSEG), reference freight rates for very large crude oil tankers (VLCC) sailing from Middle East to China increased from 44.92 Worldscale points on June 12 to over 90 Worldscale points on June 24, before the ceasefire declaration. Worldscale points are used as a percentage of a fixed basic fee determined at the beginning of the year for each major route.
The reference freight started to decline as of June 25, when the ceasefire came into effect, and fell to 50 WorldScale points as of June 30. Thus, the cost of transporting crude oil from the Middle East to China decreased by 44.5 percent compared to the pre-ceasefire period.
Reference freight rates for LR2-type medium-sized tankers carrying refined petroleum products on the TC1 route from the Middle East to Japan approached 230 Worldscale points on June 24, while they were 116.84 Worldscale points on June 12, before the ceasefire announcement.
As costs began to decline as of June 25, when the ceasefire was in effect, the reference freight for transporting petroleum products on the Middle East-Japan route fell to 140 Worldscale points on June 30, a 39 percent decrease compared to the pre-ceasefire period.
Although transportation costs in the Strait of Hormuz are still above pre-conflict levels, analysts say the market is shifting from a risk-focused structure to one shaped by supply-demand dynamics, and there is potential for a decline in freight prices.
AA
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