LONDON

Oil transportation costs have dropped sharply, and shipping traffic has increased through the Strait of Hormuz following last week’s ceasefire between Iran and Israel, easing concerns over disruptions in the key waterway.

The 12-day conflict between the two countries had raised fears that Iran could close the strait, a strategic chokepoint for global oil and liquefied natural gas (LNG) trade. That threat triggered price spikes and higher transportation costs.

While no major decline in commercial traffic was recorded during the conflict, concerns eased after the ceasefire was declared on June 24.

The UK Maritime Trade Operations (UKMTO) described the threat level in the region as “significant” in its latest Middle East assessment but confirmed that shipping traffic in the strait has returned to normal and that there is currently no threat to navigation.

The organization said strengthening the ceasefire would help reduce maritime tensions in the Persian Gulf.

UKMTO data shows that 885 ships passed through the Strait of Hormuz between June 23 and 29, a 4% increase compared to the previous week, when clashes were ongoing.

More than 900 commercial ships had used the strait during the week before Israel’s attacks on Iran, according to the same data.

Real-time tracking platform MarineTraffic also confirmed that two-way commercial traffic continued during the conflict and that crossings moderately increased after the ceasefire.

On June 12, the day before Israel’s attacks, 88 ships passed through the strait. That figure rose to 103 on June 13 before dropping to 85 on June 17, the lowest point during the conflict.

On June 24, the day the ceasefire was announced, ship traffic rose to 110 vessels per day.

Oil transportation costs

During the conflict, fears of closure and increased caution among tanker operators drove up the cost of transporting crude oil and petroleum products through the strait.

Shipments to Asian markets were particularly affected, with transportation costs rising on the Middle East-China and Middle East-Japan routes.

According to London Stock Exchange data, the cost of transporting crude oil from the Middle East to China has since fallen by 44.5% compared to pre-ceasefire levels.

Analysts say that while transportation costs through the Strait of Hormuz remain above pre-conflict figures, the market has shifted from a risk-driven dynamic to one shaped by supply and demand, creating room for freight rates to decline further.