What The Strait Of Hormuz Reopening Could Mean For Supply Chains

The US-Iran framework agreement, aimed at restoring stability in the Middle East, along with reports that the Strait of Hormuz could reopen on Friday, has already boosted global market confidence.

But what has changed, and what should importers and exporters expect in the weeks ahead?

Oil Prices

Oil prices have fallen below $80 per barrel this week, down from conflict-driven highs approaching $120. Lower crude prices should gradually reduce carrier and transport fuel surcharges. However, bunker fuel and diesel costs typically lag crude market movements, so any reduction in shipping and transport surcharges is unlikely to happen immediately.

Sea Freight

Even if the Strait of Hormuz reopens on Friday as expected, shipping operations are unlikely to return to normal straight away. Carriers will need to complete security assessments and may require approval from naval authorities before resuming regular transits. Safe passage must also be confirmed, including the removal of any navigational hazards.

With the agreement reportedly lasting only 60 days, carriers are expected to remain cautious. Even if conditions remain stable, shipping lines will likely take time to fully restore schedules and service patterns.

A large number of delayed vessels returning to the Gulf at once could create congestion at Middle Eastern ports. Increased outbound volumes may also place pressure on ports further along global trade routes, particularly as the Asian peak shipping season approaches.

Questions also remain around future transit costs. While President Trump has said vessels will be able to use the Strait “toll-free”, Iranian state media have suggested service fees could be introduced under a joint management arrangement with Oman.

Marine Insurance

Marine (Cargo) insurance costs may also begin to ease. War-risk premiums increased sharply during the disruption, reflecting heightened risks to vessels operating in the region. While a sustained period of stability should reduce these premiums, costs are likely to remain elevated until shipping activity normalises and confidence fully returns.

Summary

If the Strait of Hormuz reopens as expected on Friday, it will be a positive development for global logistics and supply chains. While market reaction has been encouraging, the situation remains fluid and a long-term resolution is not yet guaranteed.

Croft Cargo will continue to monitor developments closely. In the meantime, businesses should remain cautious and continue factoring potential disruption into supply chain planning until longer-term stability is established.

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