What to Know About the Strait of Hormuz Under the Cease-Fire

The fragility of the cease-fire — Iran said on Wednesday that Israel’s attacks on targets in Lebanon had violated the agreement — was the main reason ships were holding back, shipping industry participants said.

“It’s too unstable for anyone to commit,” said Oscar Seikaly, chief executive of NSI Insurance Group, a maritime insurance brokerage.

What has to happen first for ships to go back?

First, shipping analysts say, there has to be confidence that the cease-fire will hold. And then there has to be a declaration from Iran that it will not attack vessels.

“Iran must clarify that the strait is open for safe passage. Otherwise, vessels should not be expected to sail through the way they were doing prior to the war,” said Noam Raydan, a senior fellow at the Washington Institute for Near East Policy.

But Iran is also demanding that it oversee and coordinate passages through the strait. The government hasn’t clearly stated what vessel operators must do to gain permission to pass through. Some shipowners have made “toll” payments to Iran. And, according to Kpler, a shipping tracking firm, most of the crossings during the war have taken a route that goes close to Iran’s coast. This suggests that Iran requires taking this route.

Iran’s official broadcaster said on Wednesday that, because of anti-ship mines in the traffic zones, vessels must coordinate with the Iranian Navy and use designated routes to cross the waterway.

Do governments have to get involved?

The governments of India, Pakistan and Thailand have worked with Iran to ensure safe passage of vessels.

In a joint statement on Wednesday, the leaders of seven European nations, Canada, the European Commission and the European Council said their governments “will contribute to ensuring freedom of navigation” in the strait.

President Trump suggested on Wednesday that the United States might jointly control the strait with Iran.

“The United States of America will be helping with the traffic buildup in the Strait of Hormuz,” Mr. Trump said in a social media post. “There will be lots of positive action! Big money will be made.”

ABC News reported on Wednesday that Mr. Trump had told one of its reporters that the United States could operate shipping in the strait “as a joint venture” with Iran.

Will shipping return if Iran doesn’t give up full control?

Analysts say Iran can continue to act as a gatekeeper if the number of vessels going through the strait remains relatively small. But it would not be able to manage the more than 100 ships a day that passed through the strait before the war.

“Blanket passage arrangements are unlikely to be implementable by Iran, due to capacity constraints around vessel identification and ongoing requirements to guide vessels through the corridor,” Jack Kennedy, head of Middle East and North Africa country risk at S&P Global Market Intelligence, said in an email.

Also, the threat of war will linger if Iran keeps throttling the strait. The Persian Gulf states do not want Iran to have such power over the waterway. Oman, the country on the other side of the strait, could invite ships to pass close to its coastline, but such a move might prompt Iran to attack the vessels.

Will shipping companies pay a toll to Iran?

Given that more than 100 large commercial ships have gone through the strait since the war began, some vessel operators are willing to negotiate with Iran and even pay millions of dollars for a passage. Shipping companies are losing money on vessels that are waiting to go through the strait, so they may be willing to pay large sums to get their ships out into the Indian Ocean and operating normally.

Still, the larger, more established shipping companies may decide that doing business with Iran is too much of a legal risk, particularly if the United States continues to impose sanctions on Iran.

“The issue of sanctions on Iran makes it a very complicated process, since it involves financial transactions with a sanctioned regime,” Ms. Raydan said.

In the attempts to forge a lasting peace, there will be pressure on Iran to give up any plan to demand payments for passages.

Britain’s defense secretary, John Healey, said on Thursday that Britain and its allies wanted to see the strait “open, free, consistent with the long established laws of international navigation, without any sort of tolls for passage.”

How hard is it to get insurance?

When the fighting began, the cost of “war risk” insurance for ships and cargo going through the strait skyrocketed. A few shipping companies bought it, and it has been available at times during the war, Mr. Seikaly, the insurance executive, said. But the fragility of the cease-fire has driven down demand for insurance.

“It is not the right moment, and everyone knows that,” he said. ( Courtsey from The New York Times)

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