Strait of Hormuz splits into 3 routes as shipping risks persist

Three competing shipping lanes now traverse the Strait of Hormuz, fragmenting what was once a single international waterway into a contested corridor controlled by Iran, a US-led coalition, and no one at all.

The Strait of Hormuz has fractured into three separate shipping routes — one controlled by Iran, one by a US-Omani coalition, and a third abandoned international lane — as the June 17 ceasefire fails to restore normal traffic, CNN reported June 29.

"With the threat of attacks hanging over the Strait, it's still a tense time for shipowners," Susannah Streeter, chief investment strategist at Wealth Club, said. "While the key waterway may have reopened, it's far from business as usual."

Before the Iran War began Feb. 28, 90 to 110 vessels passed through the strait daily. That flow collapsed by more than 90% at the height of the conflict. Recent data shows dozens of vessels making crossings on some days, but cargo throughput remains at roughly half of pre-war crude levels, according to LSEG ship-tracking data. VLCC earnings on the Middle East-to-China route have plunged to about $287,000 a day from more than $500,000 before the peace accord, as vessels accumulated in the Gulf ahead of a recovery in moveable cargoes.

The fragmentation creates a new layer of risk. Iran's northern route comes with a 60-day fee waiver that expires without clarity on what happens next, while the southern corridor — coordinated by Oman, the US and the International Maritime Organization — bypasses Iranian-controlled waters entirely. With Iran's foreign minister insisting that full restoration of maritime traffic is "Iran's responsibility," the stage is set for a prolonged governance battle over one of the world's most critical energy chokepoints.

The three-route system emerged from the wreckage of the three-month Iran War, which ended with a memorandum of understanding signed June 17 by President Donald Trump and Iranian President Masoud Pezeshkian. But the ceasefire has proven fragile. On Saturday, an Iranian drone struck the Panama-flagged M/T Kiku, prompting US military aircraft to hit Iranian military infrastructure. The Islamic Revolutionary Guard Corps responded with drones and missiles on the US Fifth Fleet Naval Base in Bahrain and Ali Al Salem Airbase in Kuwait. Both sides agreed to stand down Monday.

The northern route remains under the control of Iran's IRGC, which had charged vessels to use the waterway in breach of international maritime law before the war. That fee was waived for 60 days under the MoU, with no clarity on what happens after the period expires. "Iranian officials have continued to hint that service fee could be introduced once the 60-day period expires," Streeter said. "Even the possibility is enough to keep shipping companies on edge."

The southern route, running close to Oman's coast, offers an alternative. Oman has coordinated with the IMO to open temporary shipping corridors that allow vessels to bypass IRGC-controlled waters. Clionadh Raleigh, CEO of ACLED, said the arrangement would deny "quite a bit of Iran's control over the strait." But the IMO paused an evacuation effort for hundreds of stranded ships last week after a vessel was attacked in the Gulf of Oman, showing the persistent security risks.

Ballast Flows Signal Recovery Hope

Despite the operational chaos, shipowners are placing bets on a return to normal. Ship-tracking data shows increasing numbers of empty tankers re-entering the Gulf, including LNG carriers linked to Qatar that have resumed voyages into Hormuz for the first time since the conflict began. Ballast movements — empty ships heading into the Gulf to load — are a leading indicator of forward expectations, and they are flashing strongly.

Freight rates reflect the tension between hope and reality. Rates for fuel tankers from Nigeria to the Netherlands have climbed from about $63,000 a day in mid-June to more than $112,000 currently, as the concentration of vessels around the Arabian Gulf tightened capacity in other regions. Fleet managers have also dispatched refined product tankers toward the Middle East in anticipation of regional refineries needing to clear inventories built up during the conflict.

Gala Riani, head of strategic intelligence at security firm S-RM, said Iran views its control over the Strait "as an existential lifeline" that has allowed the regime to survive. "It is unlikely that Iran will give up this strategic leverage," she said. If Iran's plans to charge vessels are deemed unacceptable to the US, "the range of options on the table for applying pressure on the regime include the potential return to military conflict, naval and economic blockades, and tightened sanctions."

The last time a major chokepoint faced this level of governance fragmentation was during the 2019-2020 tanker tensions in the same waterway, when Iran seized vessels and the US formed the International Maritime Security Construct. That episode lasted 18 months and reduced traffic by about 25% before a diplomatic resolution emerged. The current disruption is far deeper — traffic collapsed by more than 90% at its worst — and the three-route system suggests no single governance framework is likely to emerge soon.

For oil markets, the implications are clear. Brent crude prices already carry a geopolitical risk premium, and the fragmentation of the Strait adds a structural layer of uncertainty that will persist as long as Iran and the US operate competing transit regimes. With Doha talks underway this week and the 60-day fee waiver ticking, the next few weeks will determine whether the Strait of Hormuz returns to its role as a reliable artery of global energy trade or remains a contested corridor.

This article is for informational purposes only and does not constitute investment advice.