Impact of Major Traders Suspending Oil and Gas Shipments via Hormuz: What It Means for Investors and Businesses in Oman
The U.S. Department of Transportation has advised commercial vessels to avoid the Gulf region following significant bombing campaigns by the U.S. and Israel against Iran. In a statement issued on Saturday, the department’s Maritime Administration highlighted that the Strait of Hormuz, the Sea of Oman, and the Arabian Sea are currently experiencing “significant military activity.” It is recommended that vessels remain clear of these areas whenever possible.
Furthermore, ships that are flagged, owned, or crewed by the U.S. are advised to maintain a distance of at least 30 nautical miles from any U.S. military vessels to reduce the risk of being perceived as a threat.
Several major oil companies and trading houses have halted shipments of crude oil, fuel, and liquefied natural gas (LNG) through the Strait of Hormuz as tensions escalate with U.S. and Israeli operations against Iran and subsequent retaliatory actions from Tehran. One senior executive from a major trading desk commented, “Our ships will stay put for several days.”
The tanker association INTERCARGO has relayed warnings from the U.S. Navy, which indicated it could not ensure the safety of neutral or merchant shipping in the operational area encompassing the entire Gulf, the Sea of Oman, the North Arabian Sea, and the Strait of Hormuz.
According to Laura Page, Kpler’s insight manager for LNG and natural gas, eleven LNG tankers in ballast have displayed signs of slowing, U-turning, or halting in or around the Strait. She indicated that this number is likely to increase over the coming days and could jeopardize Qatari LNG supplies to the international market.
Florence Schmit, an energy strategist at Rabobank, cautioned that if Qatar—an essential player in stabilizing both the Asian and European LNG markets—were to face export challenges due to infrastructure damage or shipping disruptions, the impact on global gas prices would be significant.
Special Analysis by Omanet | Navigate Oman’s Market
The recent escalation in military activities in the Gulf poses significant risks for businesses operating in Oman, particularly in the energy and shipping sectors. Opportunities may arise for those who can innovate supply chain solutions or alternative transport routes, as disrupted LNG and crude oil shipments could lead to heightened prices and demand. Smart investors should closely monitor regional developments and prepare for potential shifts in the global energy market, as any further disruptions could have widespread implications.
