Why restoring normal traffic through Hormuz won’t be easy

Returning traffic in the Strait of Hormuz to prewar levels – if that day ever comes – presents significant challenges.

The US and Iran have committed to reopening the Strait of Hormuz, the world’s most important artery for shipping oil and natural gas, which has been largely blocked since the two countries went to war in February.

However, returning traffic in the strait to prewar levels – if that day ever comes – presents significant challenges.

The prediction market Kalshi assigns a 51 per cent probability that traffic will return to normal before Aug 1 and a 68 per cent probability before Sept 1.

Iran is thought to have mined what was the normal shipping channel through Hormuz, which connects the Persian Gulf to the Indian Ocean and is situated between Iran to its north and the United Arab Emirates and Oman to its south.

The threat of mines has forced ships to sail instead near Iran’s coastline or closer to Oman’s.

Use of the southern route, overseen by US forces, has already allowed oil flows to creep higher.

But the question of how much traffic the alternative routes can handle has not been fully tested.

Clearing the centre of the channel of any mines would help to get flows back to normal.

However, it is unclear who would undertake this effort and how demining ships would be protected.

On top of the threat of mines, there is the risk of further violence that could affect ships and their crews.

The fragile ceasefire the US and Iran have had in place since April 8 has not stopped fighting all together.

At least 14 seafarers have died in this conflict, and there have been 46 attacks that damaged ships, according to the United Nations’ International Maritime Organization (IMO).

Merchant sailors are nervous about working in conflict zones at the best of times, so the shipping industry wants to hear unambiguous assurances from both the US and Iran that hostilities have truly ended.

Even then, several shipowners said some crews may be reluctant to return to the Persian Gulf, which could reduce the number of vessels sailing to the region to collect cargoes.

Until the war began, freedom of navigation was, with a few exceptions, taken for granted in Hormuz, just as it is in all major shipping straits.

It is not clear whether that will remain the case in the future.

Iran’s semi-official Fars New Agency reported that the future administration of “navigation services” in the strait will be determined by Iran and Oman.

Several shipowners told Bloomberg they would rather not be forced to communicate with anyone, but especially not an Iranian reg