Strait of Hormuz Enters Active Crisis: Five Ships Hit, Traffic Collapses, Tanker Markets Brace for Historic Shock

The Strait of Hormuz has entered its most dangerous phase in years after a concentrated wave of missile and drone attacks struck five commercial vessels across the Gulf of Oman and UAE waters. With ports temporarily suspending operations, insurers reassessing war-risk exposure, and AIS data showing transits collapsing, the region’s maritime security environment has shifted from elevated tension to active crisis.

As of Sunday, the Joint Maritime Information Center (JMIC) has elevated the regional maritime threat level to CRITICAL after confirmed missile and drone attacks against multiple commercial vessels in the Gulf of Oman, the Musandam approaches, and UAE coastal waters — a designation indicating an attack is considered almost certain.

In just 24 hours, five vessels were struck or targeted in what security analysts describe as one of the most concentrated waves of attacks seen in the region in years.

Casualties Across Multiple Incidents

The most serious incident occurred roughly 44 nautical miles northwest of Muscat, Oman, where crude tanker MKD VYOM was struck above the waterline. The impact triggered an explosion and engine-room fire, killing one crew member. As of March 2, the blaze was reported under control and the vessel remained afloat pending towage to a safe port.

Earlier, the tanker SKYLIGHT, anchored five nautical miles north of Khasab, Oman, caught fire following an attack. Four of the 20 crew members — 15 Indian nationals and five Iranians — were injured. The entire crew was later evacuated.

The U.S.-flagged chemical/products tanker STENA IMPERATIVE was struck by multiple projectiles while berthed at Salman Industrial City in the Port of Bahrain early March 2. One shipyard worker was killed by debris and two others seriously injured. Iranian-origin drones or missiles are believed to have been used.

The oil tanker HERCULES STAR was hit approximately 17 nautical miles northwest of Mina Saqr, UAE. A fire broke out onboard but was extinguished. No injuries were reported, and the vessel later continued under its own power.

Meanwhile, Panamax bulk carrier OCEAN ELECTRA reported a near-miss roughly 35 nautical miles west of Sharjah, UAE, sustaining no damage.

“All Vessels at Risk”

According to JMIC, there is “no clear operational or political association” linking the targeted vessels.

“All merchant vessels, regardless of flag or nationality, are at risk,” the advisory stated.

Stand-off missile and drone threats remain active across the Strait of Hormuz and Gulf of Oman. There is no confirmed sea mine activity at this time.

Port and Energy Infrastructure Targeted

Regional infrastructure has also come under attack:

• Jebel Ali briefly suspended operations following an aerial interception that caused a fire before resuming limited activity.
• Duqm Port in Oman remains operational after two UAV strikes injured one worker.
• Ras Tanura Refinery in Saudi Arabia was reportedly shut following a drone strike and fire.
• Bahrain temporarily suspended port operations and pilotage services.
• Qatar’s Ras Laffan and Mesaieed ports reported significant GPS signal degradation.

Significant GNSS/GPS interference is being reported across the Strait’s approaches, compounding navigational risks amid heavy congestion and heightened aerial threats.

Hormuz Traffic Drops Sharply

AIS tracking indicates transits through the Strait may have fallen to just 28 vessels over a 24-hour period — roughly an 80% decline from the historical daily average near 138 vessels.

Cargo transits dropped from 98 combined eastbound/westbound movements on February 28 to just 18 on March 1. Tanker movements fell even more sharply, from 50 combined transits to just three.

JMIC cautioned the drop may reflect a short-term pause rather than a structural halt, but insurers and operators are clearly reassessing risk.

Insurance Becoming a Gating Factor

Several protection and indemnity clubs are reportedly reviewing or issuing war-risk cancellation notices for Gulf waters as reinsurers pull back capacity.

“Insurance availability may now act as a primary gating factor for transit decisions independent of formal navigational closure,” JMIC noted.

Even absent an official blockade, the combination of aerial threat, port suspensions, insurance withdrawals, and GPS disruption is effectively constraining commercialadfad movement.

Tanker Markets Brace for Shockwave

The conflict, having severely disrupted maritime traffic through the Strait of Hormuz, is creating what analysts warn could be a historic upheaval in the crude tanker market. The strategic waterway, which connects crude oil exporters in the Persian Gulf with global markets, handles roughly 15 million barrels per day of crude oil—equivalent to nearly one-third of global seaborne crude trade.

With vessels now diverting away from the Strait to evade the threat of attack, and insurers withdrawing war risk cover, the disruption has already impacted more than 11 million barrels per day of crude supply.

Brent Crude futures climbed from $73.15 per barrel on February 27 to $79.11 per barrel by March 2, following retaliatory strikes in the Gulf, according to analysis from Drewry Maritime Research.

Limited Alternatives Amplify Supply Crisis

The crisis is particularly acute because viable alternatives to bypass the Strait are extremely limited. All major Middle Eastern OPEC producers—Saudi Arabia, Iran, the UAE, Kuwait and Iraq—depend heavily on this route for their crude exports.Although Saudi Arabia, the UAE and Iraq operate pipelines that provide partial overland export options, their combined spare capacity is estimated at only around 4 million barrels per day.

“Sustained blockade in crude flows through the Strait of Hormuz would have profound implications for global oil supply and energy security,” according to Drewry’s assessment, which warns of “a sharp spike in oil prices, heightened market volatility and significant downstream effects on inflation and economic growth worldwide.”

Tanker Rates Set for Historic Rally

The disruption is expected to trigger a dramatic shift in crude tanker freight rates, particularly for Very Large Crude Carriers. “A sudden tightening of Middle Eastern crude flows would not only drive oil prices sharply higher but also trigger a strong rally in tanker freight rates,” Drewry’s analysis states.

As importers diversify sourcing strategies, long-haul trade routes—such as US Gulf/West Africa to Asia—would expand significantly, increasing ton-mile demand and requiring rapid vessel repositioning, temporarily tightening available tonnage.

VLCC rates, already elevated due to tight fleet availability and concentrated ownership, “could spike to new highs,” according to the assessment. “The combination of heightened risk premiums, longer voyage distances, and short-term logistical inefficiencies would strongly underpin spot earnings across crude tanker segments.”

Asian Markets Face Acute Exposure

While approximately 88% of crude passing through the Strait of Hormuz is destined for Asian markets—with China, India and Japan as the largest importers—the ongoing disruption would tighten global oil supply. The constrained supply through this critical chokepoint would tighten the global oil balance and amplify competition for alternative cargoes.

Bunker Costs to Surge

The ripple effects extend beyond crude markets. Any sustained spike in crude oil prices would directly lift bunker fuel prices, as marine fuels are derived from refinery feedstocks linked to crude benchmarks. Higher feedstock costs would translate into elevated bunker prices across major bunkering hubs, significantly increasing voyage expenses and operating costs across shipping sectors.

In a scenario of prolonged supply tightness, refiners may be forced to reduce throughput due to limited crude availability or margin compression, further tightening bunker supply and placing sustained upward pressure on prices.

Duration Remains Critical Variable

Drewry analysts stressed that the duration of any disruption is critical to the ultimate market outcome. In the immediate aftermath, there will be chaos as buyers scramble to secure alternative barrels from West Africa, Latin America and North America.

However, OPEC+ has announced a production increase of only 206 thousand barrels per day from April—incremental additions that “would offer little relief if the Strait remains closed,” according to Drewry. Spare production capacity outside the Middle East is limited, meaning replacement volumes would be insufficient to offset a large-scale disruption of Gulf exports.

Prolonged Closure Could Reverse Gains

While the initial market response favors tanker owners, a prolonged disruption presents a more complex scenario. With limited spare capacity outside the Middle East, any extended closure of the Strait of Hormuz would push oil prices into uncharted territory, potentially eroding oil demand and prompting economies to seek alternative energy sources such as coal.

In the event of prolonged supply disruption, refineries would initially draw down commercial crude inventories, and governments would likely release barrels from their Strategic Petroleum Reserves to stabilize domestic markets. However, according to the latest data from the International Energy Agency, OECD commercial oil inventories currently cover approximately 62 days of forward demand—meaning even assuming a 20% global supply deficit, such inventories would only provide a temporary cushion.

“Therefore, while crude tanker markets may initially experience a sharp rate spike, prolonged disruption would eventually shift the dynamic from tonne-mile expansion to demand destruction and trade contraction—leading to a more complex and potentially weaker freight environment over the medium term,” Drewry concludes.

The global economy remains structurally dependent on Middle Eastern crude supply, with inventories finite and temporary buffers unlikely to sustain extended disruption. For now, tanker owners face what could be a historic but potentially short-lived windfall, with the ultimate outcome dependent on geopolitical developments in the days and weeks ahead.

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