Hormuz lanes may be swept, but Gulf freight and war-risk costs stay high

Admiral Brad Cooper, commander of US Central Command, said on 30 October that the primary internationally recognised transit routes in the Strait of Hormuz have been "successfully cleared of Iranian sea mines"¹. In a post carried by CENTCOM on X, he said he had flown over the strait and seen dozens of merchant ships transiting¹. US forces had also helped Gulf partners export more than 1.5 billion barrels of crude since summer while enforcing a blockade on Iranian ports, he said¹.

The IRGC had already dismissed the claim on 29 October, before Cooper's remarks. Its spokesman, Brigadier General Hossein Mohebbi, quoted by the state news agency IRNA, asked Washington to "Prove the claim of minesweeping the Strait of Hormuz with independent evidence, not with statements!"¹.

The same message, a second time

Cooper made a similar statement on 25 October, when US forces marked 1.5 billion barrels exported and more than 3,000 commercial ships transited with CENTCOM support over six months⁷. The International Maritime Organization counted a record 29 attacks on shipping around Hormuz between 1 and 22 October^3, 7.

Attacks continued after his flight. On 29 October, a small boat fixed two devices to the hull of the tanker Louise 1 about 25 nautical miles northeast of Khasab, starting a fire in the engine room, UKMTO reported⁸. On 30 October, Oman's navy evacuated 25 crew from the tanker Riti after it was set ablaze; Orbital Risk Intelligence said an Iranian missile struck it⁹. The IRGC said it had attacked two tankers on either side of the strait, a third inside it and a fourth outside⁹.

Prices show no relief for Gulf cargoes

Assessments published around the same time show a still-high market. Clarksons Platou put the global average VLCC spot rate at $564,300 a day on 30 October, with a near-term floor of about $500,000 a day². Affinity Research said VLCC rates continued to rise through the week¹⁰. Vortexa warned that war-risk premiums around Hormuz staying at record highs would keep rates high³.

Not every rate is stuck at a peak. Vortexa put VLCC rates from the US Gulf and West Africa 27% and 32% below record highs after two weeks of falls, though it judged a return to pre-war levels unlikely³. Brent touched $118 on 30 October and ended the day at $117.70⁹. Brent spot was $123.10 a barrel on 27 October, up 6.8% on a week earlier¹¹.

Sweeping moored mines does not clear the premium

Insurance covers what can still hit a ship. The 29 October attack was a small-boat operation, not a moored mine, UKMTO reported⁸. Orbital Risk Intelligence said an Iranian missile struck the Riti the next day⁹. Reporting has also become patchier. "It is known now that companies are not reporting attacks to UKMTO/NCAGS as frequently as before, so attack volumes aren't accurate," said Martin Kelly of Orbital Risk Intelligence⁹.

The Lloyd's Market Association's Joint War Committee sets the listed areas that trigger extra premiums. It expanded those areas this year in the Black Sea, the Red Sea, the Persian Gulf and the Arabian Sea, according to its head of marine and aviation, Neil Roberts¹². A change to that list is the signal that would move the extra war-risk premium a ship pays for a transit. That, rather than a military statement, is what would change a buyer's freight bill.

Flows are recovering; the workaround is what costs

Part of the US account is supported by physical data. Satellite images showed nine VLCCs moored at Saudi Arabia's Persian Gulf export terminals on Wednesday, the most activity there since hostilities began at the end of February⁴. One day does not prove a trend: across 96 Sentinel images since mid-June, the average was two berths in use, and nearly a third showed all berths empty⁴.

S&P Global Commodities at Sea counted six VLCC transits on 25 October, the most since 17 October⁷. It also logged five LPG tankers crossing between 23 and 25 October, one of them outbound on a dark transit⁷. One of those carriers had earlier transferred cargo at Vadinar, India⁷.

The recovery runs through ship-to-ship transfers, which add cost and time. Vortexa estimates that more than half of west-of-Hormuz seaborne crude exports, about 6 million barrels a day, move by transfer³. That occupies around 30 VLCCs, and a shuttle run takes 12 to 13 days from entering the strait to completing a transfer³. Sparta's Aaron Kildow put loading prices inside Hormuz $20 to $30 a barrel above those at the lightering zone, which is the reward owners take for the added risk¹³.

The International Energy Agency put the cost of moving a barrel from the Middle East Gulf to Asia above $37 in mid-October, more than five times pre-war levels¹⁴. For a 2 million barrel VLCC cargo, that is more than $74 million against less than $15 million before the conflict¹⁴. Vortexa also counts 18 non-Iranian VLCCs likely out of operation since the conflict began, equal to around 2% to 3% of the mainstream fleet³.

What Indian buyers are still paying

India's crude import basket averaged $120.46 a barrel to 26 October, the highest in 14 years, with marine insurance and freight cited among the drivers¹⁵. The rupee was at 95.08 to the dollar on 27 October and 94.95 on 30 October^15, 16. Under-recoveries on LPG at the three state fuel retailers were around ₹62,000 crore¹⁵. Equirus Securities, commenting on HPCL's results, said crude sourcing remains highly volatile and almost all cargoes are now bought on a delivered basis, against about half earlier¹⁵.

For container buyers there is one visible cut. Maersk will reduce its Emergency Contingency Surcharge from Jebel Ali, Fujairah, Khor Fakkan and Sohar to West Africa by $500 per container from 1 November¹⁷. It is a West Africa lane, but the clearest published cut in a Middle East-linked surcharge this week.

The next test is 1 November

Iran's Persian Gulf Strait Authority has said it will take "legal action" against the entire Sinokor fleet from 1 November, claiming the company's ships broke its transit rules⁵. That matters because Sinokor moved 105.6 million barrels of crude through Hormuz in September, almost 40% of the oil that crossed⁶.

Traders are also watching Washington. US officials have warned regional allies of possible military strikes lasting several days after the 3 November midterm elections, according to the Associated Press, as cited by Clarksons Platou². Until a listed area changes or a war-risk quote falls, the minesweeping claim has no price behind it^2, 12.