Strait of Hormuz Closure: Oil at $97.50 as Iran Holds Line

Iran said the Strait of Hormuz will remain closed to all vessels until further notice, repeating a position it staked earlier in the day. The waterway, through which roughly 20% of the world's oil passes, has been effectively shut to commercial traffic since the initial announcement.

Ship tracking data shows fewer than 10 vessels per day crossing the strait, down from normal traffic of roughly 17 million barrels of crude daily. The count may rise to 10-30 if shadow-fleet tankers with transponders turned off are included, though the actual figure is hard to pin down. Larger commercial vessels are not among those still crossing.

Maritime insurers have pulled coverage for transits through the strait. Any vessel that crosses now does so at its own risk, with AIS transponders switched off to avoid detection. Even if the strait reopens, insurers will not necessarily reinstate coverage immediately, meaning delays to any recovery in traffic are likely.

The closure is Iran's biggest bargaining chip in negotiations with the US. As long as no deal is reached, the strait stays shut in any meaningful sense. Oil tested $97.50 on the news, with the risk of a sustained supply disruption now priced into the front-month contract.

For traders, the key variable is not the closure itself but the timeline for talks. Iran has signalled no willingness to reopen without concessions. The US has not publicly shifted its position. Until one side moves, the strait remains a bottleneck that keeps crude elevated and shipping costs unpredictable.