The Southern Route Through Hormuz Is No Longer Safe, Regardless of What Trump Says

For the best part of a year, shipowners transiting the Strait of Hormuz have worked to a simple and largely unspoken rule of thumb, stay off the Iranian side, hug the Omani coast, and the risk profile improves considerably. That rule died in the early hours of Tuesday morning. 

By Paul Morgan (gCaptain) – Two UAE flagged crude carriers, Al Bahiyah and Mombasa, both operated by ADNOC Logistics and Services, were struck by Iranian cruise missiles while running the southern traffic lane through Omani territorial waters, the very corridor the industry had quietly adopted as its least-worst option. 

One Indian seafarer was killed and eight crew injured, four of them seriously, before fires that had taken hold on both vessels were brought under control. Iran’s Islamic Revolutionary Guard Corps claimed the strike within hours, describing the tankers as having ignored warnings and entered what it called a mined or prohibited route, and accusing the United States of directing merchant traffic into that lane deliberately.

In a Truth Social post on Monday, Trump declared that Hormuz “is OPEN, and will remain OPEN, with or without Iran,” following several days of escalating U.S. strikes against Iranian targets, while urging commercial shipping to use the southern traffic lane along Oman’s coast. The reality is that the strait may technically remain open, but the route is no longer safe.

Many of us have spent enough years at sea and time ashore managing tanker operations to recognise when an incident is more than the sum of its casualty figures, and this is one of those moments. The southern lane was never advertised as safe in any formal sense, no P&I club or flag state ever certified it as such, but it had become the de facto working assumption across the fleet, reinforced by months of relatively unmolested transits while the northern lane, hard against the Iranian coast, absorbed the bulk of the attention and the ordnance. 

That assumption has now been tested and found wanting. If Iranian forces can put cruise missiles accurately onto two large tankers inside Omani waters, at the southern extremity of the strait, then geography alone no longer offers masters and operators any meaningful protection. The Strait of Hormuz, for practical purposes, has become uniformly contested water from shore to shore.

It is worth being honest about why this matters more than some of the earlier incidents this year, including the attacks on the presumed Qatari LNG carrier Al Rekayyat and a Saudi flagged crude tanker off Oman a week or so before this latest strike, and the projectile attack reported some forty nautical miles off Qalhat. Those events were troubling, but they left open the possibility that the southern route retained some residual margin of safety, that operators simply needed to route further south still, or time transits differently, or improve situational awareness. This week’s attack closes off that line of reasoning. 

Two large, slow-moving, well-identified tankers operating well inside what had been regarded as the safer half of the strait were engaged and disabled. There is no further south to go. Any operator still telling its crews and its underwriters that the southern lane carries a materially lower risk profile is now working from an assumption the last forty-eight hours have directly contradicted.

The strategic logic behind targeting UAE tonnage specifically deserves attention too. The Emirates occupy an awkward position in this conflict, closely tied into Western security architecture while maintaining commercial and diplomatic channels with Tehran that most of the Gulf Cooperation Council would envy. Striking Emirati shipping allows Iran to signal displeasure and demonstrate reach without the far greater escalatory risk of engaging a US Navy asset directly. It also serves a second purpose that should worry every fleet operator in the region, it demonstrates that Iran retains the capability, and evidently the intent, to threaten shipping across virtually the full width of the strait rather than merely in the waters closest to its own coastline. For a military that has spent much of this war under sustained American air attack, that is not a small thing to prove.

The commercial consequences are once again working their way through the market, and are expected to accelerate through the rest of this week. War risk premiums for Hormuz transits, which had eased modestly during the periods of relative calm earlier in the year, will be reassessed upward, and I would not be surprised to see London and Oslo markets move within days rather than weeks given the location of this attack. More significant, in my view, is what happens to the geographical scope of what underwriters are prepared to cover at standard rates at all. Insurers have historically drawn their additional premium boundaries with some reference to proximity to the Iranian coast, treating the northern lane and the waters off Bandar Abbas as the highest risk zone and pricing accordingly, with the southern approaches attracting a lighter loading. 

If that geographical distinction collapses, and there is now a strong operational argument that it should, the practical effect is that the whole of the strait, and quite possibly its approaches on both the Gulf and Gulf of Oman sides, gets treated as a single elevated risk zone. That has obvious implications for premium levels across the board, but it also raises harder questions for club cover, for the treatment of loss of hire, and for whether standard war risk policies remain adequate at all without bespoke endorsement for named vessels making named transits.

Owners will also be looking hard at their charterparty war risk clauses this week, and crews will be exercising, and in some cases already have exercised, their contractual right to decline a voyage into a zone they judge unsafe. That is not a theoretical entitlement. I have seen it invoked in earlier Gulf crises and I would expect a noticeable rise in refusals over the coming days, particularly among crews who have already transited the strait once during this conflict and understand precisely what they are being asked to do a second time. Owners cannot simply wave that away with reference to charterparty obligations, a crew that refuses to sail on safety grounds is exercising a right most flag administrations and most reputable operators recognise, and masters retain the final say on the safety of their vessel and crew regardless of what a charterer’s fixture note says.

Crew welfare deserves more attention than it typically gets in commentary dominated by geopolitics and freight rates. The seafarers making these transits are civilians, not combatants, yet they are now doing their jobs inside missile range, drone range and electronic warfare environments to keep cargoes moving that the rest of us take for granted. I have sailed through enough tense waters over the years to know that the psychological toll of repeated high-risk transits accumulates in ways that do not show up in a casualty report, and operators who treat this purely as a routing and premium problem are missing something owners have a direct duty of care to address.

Demand for naval escort is the next pressure point, and here the picture is more complicated than headlines suggest. No official confirmation has been offered that either Al Bahiyah or Mombasa was under any form of naval escort at the time of the attack, and the honest position remains that most merchant traffic through the strait continues to transit independently, coalition air and naval assets notwithstanding. That independence looks increasingly untenable. If shipowners conclude, correctly in my assessment, that route selection alone can no longer materially reduce risk, the industry’s attention shifts by necessity toward escorted transit schemes, convoy arrangements of the kind seen in earlier Gulf conflicts, and closer coordination with the naval forces already operating in theatre. 

Whether the coalition has the escort capacity to service anything approaching normal Hormuz throughput, some hundred or more transits a day in ordinary times, is a question I do not think anyone currently has a good answer to, and it is one that will determine how much oil actually keeps moving through this waterway in the weeks ahead rather than being routed around it via ship to ship transfer further out in the Gulf of Oman, as US Central Command has already been quietly facilitating at scale.

Which brings us to the intervention that has generated as much comment in shipping circles as the attack itself, that the United States intends to reimpose its naval blockade of Iranian ports and, more strikingly, to levy a twenty per cent fee on cargo moving through the strait, with the administration casting the US as, in the president’s own phrase, guardian of the waterway. 

We should Sett aside the politics of that framing and address it purely as a maritime and commercial proposition, because as such it raises immediate and serious difficulties. A unilateral toll of that magnitude imposed by a non-littoral state on transit through an international strait sits very uncomfortably alongside long-standing principles of freedom of navigation that the United States itself has historically championed, and it is worth noting that Iran’s own foreign minister was quick to seize on the apparent inconsistency, suggesting Tehran might undercut any such American charge. 

Whatever one makes of that exchange, a twenty per cent levy layered on top of already elevated war risk premiums, higher bunker costs from diversionary routing, and mounting crew compensation exposure would represent a substantial additional burden on an already stressed freight market, and it is not obvious who would ultimately absorb that cost, charterers, receivers, or the consumers at the end of the supply chain who generally end up carrying these things regardless of where they are nominally levied. For an industry already recalculating whether the southern route offers any protection at all, the prospect of also paying a premium simply for the right to attempt the transit, on top of everything underwriters are about to demand, adds a further layer of uncertainty to voyage planning that owners will need to factor into decisions made this week, not next quarter.

There is a broader principle at stake here too, beyond the pricing of this particular fee. For decades the international system has rested on the presumption that transit through recognised straits is a matter of law rather than negotiation, whoever happens to hold the adjacent coastline or the naval advantage at a given moment. Once commercial access to a strait becomes something routinely bargained over between belligerents and outside powers, whether through missiles, blockades or unilateral tolls, every other chokepoint operators rely on, Bab el Mandeb, Malacca, the Bosphorus, gets viewed through the same lens by the market. That is a heavier legacy than this week’s freight numbers, and it is the reason I think this episode will be remembered as more than a single bad week for two ADNOC tankers.

The wider picture this week reinforces the point rather than distracting from it. The tanker strikes did not happen in isolation, they came alongside a third consecutive night of American air strikes against Iranian targets, Iranian missile fire against US regional bases, Jordanian air defences intercepting missiles over its own territory, and Bahrain reporting intercepted drone activity over Manama. 

Brent crude responded in the way one would expect a market pricing genuine supply disruption to respond, surging by more than nine per cent to settle above eighty-three dollars a barrel, its sharpest single day move in over six years. That is not a market reacting to headline risk alone, it is a market recalculating the probability that meaningful volumes of Gulf crude simply stop moving through the strait for a period, or move only at substantially higher cost via the ship-to-ship transfers further out in the Gulf of Oman that CENTCOM has already been facilitating in growing volume. 

Kpler’s own crossing data from the preceding fortnight, showing daily transits in the low thirties against a pre-war average nearer one hundred and twenty to one hundred and forty vessels a day, tells its own story about how much of the fleet has already voted with its routing before this latest attack even took place.

Much remains unconfirmed at the time of writing, including the precise missile type and launch platform used against the two ADNOC tankers, whether their AIS transmissions were live throughout the transit, and the full extent of structural damage now being assessed alongside the fire damage already confirmed. Those details matter for the forensic reconstruction this incident deserves, and I intend to return to the track lines, the traffic separation scheme geometry, and the likely engagement envelope in more detail once the underlying data is available. 

What is already clear, and what the market has priced in within hours rather than days, is that the industry’s working theory of risk in the Strait of Hormuz needs rewriting. For months the assumption was that geography offered a margin of safety if you choose your lane carefully enough. That comfort has gone. 

What replaces it, in the near term at least, looks less like clever routing and more like naval escort, insurance repricing across the whole strait rather than selective zones within it, and a hard commercial reckoning over who pays for safe passage through a waterway that a fifth of the world’s oil once transited without a second thought.

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