Nothing has loaded at Kharg Island for more than a week. The eastern berth last had a tanker alongside on the thirtieth of July, the western one on the eighteenth, the LPG terminal on the twenty-seventh, and around seventeen tankers now ride at anchor off the island with no movement evident on any of them. Vortexa puts the last shipment out before the end of July, which makes this the most complete shutdown of Iran’s main export terminal since the war began in February. And yet oil is still leaving the Gulf.
Windward counted eight vessels inbound and nine outbound through the Strait of Hormuz on the eighth of this month, all but one of them running the Iranian-administered northern passage rather than the Omani route, with Kpler and Commodity Context putting the flow at four to five million barrels a day. Gulf oil is still getting through Hormuz, by a route and a set of terminals it was not using a year ago.
What has replaced the old geography is a set of workarounds, and this was the week their limits became visible. Fifty-six tankers now shuttle between GCC ports and a ship-to-ship anchorage in the Gulf of Oman, almost all of them with transponders off. Saudi crude crosses to the Red Sea by pipeline and sails west through Suez to American refineries, because a VLCC cannot transit the canal fully laden and the detour is still shorter than the run to Asia. Ukrainian grain reaches Constanta by barge, except that the Danube is at a record low. Boxes reach the US East Coast through Panama, except that the canal has cut its draft for the fifth time this year. Each of these routes solves a problem of access and creates a problem of quantity, and quantity is settled long after the fact, in tonnes carried and days waited.
Wet Bulk
The re-routing of Gulf crude toward the United States is now measurable. American imports of Middle Eastern crude will run near 600,000 barrels a day this month, the highest since the fighting started, against nothing at all in July and a February peak around 708,000. Meanwhile, Saudi Arabia has been pushing output to Yanbu through its east-west pipeline to get clear of the attacks inside Hormuz, and the Houthi blockade at the southern end of the Red Sea has pushed the resulting cargoes north through Suez instead. Kpler’s Matt Smith notes that sending Saudi crude to America rather than Asia “may be a preferable option given fleet logistics and the shorter time on the water.” The pull is strong enough to have drawn at least two dozen empty VLCCs toward US ports to load, and the expectation is for that to continue into late-August and September loading as American barrels do the work of rebalancing the export market.
The price of crossing the strait, for those still doing it, has reached a level that no longer resembles freight. Sinokor is reported to have fixed the 299,940-dwt Angola Prosperity to CNOOC for a mid-August loading in the Middle East Gulf at earnings estimated near $510,604 a day, within reach of the highest VLCC spot earnings ever recorded. The fixture is on subjects, and several comparable numbers have failed in recent weeks, so it reads better as the ceiling of what owners are willing to ask than as a rate the market has cleared. Even so, the direction is unambiguous: the greater a voyage’s exposure to Hormuz or Bab el-Mandeb, the larger the premium owners now demand, and the earlier peak this cycle sat near $470,000.
Further west the Houthis widened their campaign. They claimed a drone attack on Saudi Aramco’s 400,000 barrel-a-day Jazan refinery on Sunday, which the Saudi energy ministry confirmed as a fire since extinguished without injuries, and they struck the Yemeni port of Mocha near Bab el-Mandeb with missiles and drones, killing seven people and badly damaging port infrastructure. What all of this eventually costs somebody was settled this week: Precious Shipping received $10.9m from war-risk underwriters for the loss of the 30,193-dwt Mayuree Naree, hit by two projectiles in Hormuz on the eleventh of March, burned out in the engine room with three crew killed, grounded off Qeshm Island and written off as a constructive total loss.
Charterer Lens
- A Saudi cargo now reaching the US Gulf through Suez arrives on a laytime profile most desks have never run: a different discharge port, an unfamiliar local custom on tendering notice, and in the SUMED case a part-discharge and reload that belongs in the fixture, where it can be priced, before it turns up as a claim six months later.
- Hire on a Hormuz-exposed VLCC is being quoted around half a million dollars a day while demurrage rates on the same trade still reflect a calmer market. Where those two numbers have separated this far, the party carrying the delay is rarely the party the clause assumed.
- Because fifty-six tankers work the Gulf of Oman shuttle dark by design, a tracking gap is now the ordinary condition of that trade. Vetting thresholds written when gaps were exceptional will either reject acceptable tonnage or admit the wrong ship.
Dry Bulk
The Panama Canal Authority has cut the maximum draft through its Neopanamax locks to 48 feet from the twenty-sixth of this month and to 47.5 feet from the third of September, the fourth and fifth such adjustments this year, following reductions from 49.5 feet in early July to 49 feet on the twenty-fourth and 48.5 feet on the fifteenth of this month. Gatun Lake is low, El Niño is strengthening, and the authority has been explicit that the number of daily transits will not change. That choice determines who pays and how. A Neopanamax boxship carries thirteen to fourteen thousand TEU and needs about fifty feet of water to do it, so two and a half feet of lost draft takes cargo off every sailing while the slot count holds, and the options that follow are load light, split the parcel, lighter it, or re-nominate a load port and lengthen the voyage. Box lines have already put a figure on it, with Mediterranean Shipping Co. charging $100 per TEU on the affected trades and CMA CGM reported up to $320.
The same constraint arrived in Europe by a different route. The Danube is at a record low, and the barge corridor that has carried Ukrainian grain to Constanta since 2022 is thinning at the point in the season when Black Sea loadings need it most. Barges carry lighter loads, rotations fall, waiting times lengthen and river freight is running above seasonal norms, with the cost feeding into road and rail behind it. Viorel Panait, who runs the Comvex terminal at Constanta and heads the port’s business association, says his grain terminal “could take 20% more quantity to serve the Solidarity Lane project with Ukraine” but that the river does not deliver enough to fill it. Stan Tiberiu-Dan of Romania’s Forum of Professional Farmers and Processors put the knock-on plainly: “Romanian farmers no longer have access to trucks, and transport costs have increased dramatically.” Russia and Ukraine together account for more than a quarter of global wheat exports, and the river feeding their principal alternative outlet is running dry at harvest.
None of it has taken the strength out of freight. The Baltic Dry Index closed Friday at 3,089, up thirty-two on the day, with the capesize index at 5,128 and the 5TC average at $46,512, having opened the week at $41,395 and stood at $37,892 as recently as the thirty-first of July: a gain of roughly a quarter in a fortnight. Panamax firmed to 2,298 and $20,684 a day, supramax eased to 1,603 and $20,258, and the index gave back six points on Monday to 3,083. Tightening tonnage lists did the work in both basins, helped by steady West Australia iron ore enquiry, additional coal stems off the east coast of Australia and a contracting ballaster list into September, with the approach of Typhoon Dolphin adding a precautionary bid on vessel availability.
Charterer Lens
- Intake needs recalculating against 48 feet from the twenty-sixth and 47.5 from the third of September. Five changes in seven months means a fixture agreed in June carries an allowance the canal has already withdrawn.
- With daily transits unchanged, the entire restriction lands in tonnes carried. Cost the part-cargo and the lightering, and settle who carries deadfreight in the fixture, while the intake survey is still ahead of you.
- Capesize at $46,512 and up about a quarter in two weeks, with the ballaster list contracting and Chinese coal demand holding, argues for covering fourth-quarter requirement now. The cargo side is not currently supplying the correction that would reward waiting.
Macro and Regulatory
The legal argument under all of this surfaced in an op-ed by Capt. Lefteris Avagianos, and it is worth reading for what it concedes. Iran is not a party to UNCLOS and treats passage through Hormuz as innocent passage, which a coastal state may suspend; the United States and most maritime nations treat the strait as an international waterway where the right of transit passage under Article 38 cannot be suspended at all. The Convention provides for peaceful settlement of that disagreement but creates no body able to enforce a ruling or to sanction a breach automatically. A regime that cannot be enforced is being tested by a state that never signed it, which is why the practical answers this week came from underwriters, from treasuries, and in one case from a national supreme court.
Those treasuries were busy. The United Kingdom’s Foreign, Commonwealth and Development Office issued nineteen designations under its Russia regime, led by the LNG carrier Arctic Express and five oil tankers: Perseas under the San Marino flag, Torvian and Zenturo registered in Barbados, and Asteras and Visund in Palau. Also designated was Frion Ship Management, a Mumbai company the UK says helped move the Arctic Express into Russian ownership, now subject to an asset freeze and director disqualification. Specified ships are barred from UK ports, may be detained, and cannot be chartered or operated by UK persons. In Washington, the sequence that began with sanctions on twenty SeaLead entities and ten vessels in July 2025, continued in April and tightened again on the fourteenth of July, ended with the Singapore and Dubai-based line filing for voluntary liquidation.
Meanwhile the Cameroon-flagged Suezmax Caroline Bezengi, sanctioned by the EU, the UK and OFAC and previously associated with Sovcomflot, is still discharging oil two months after an explosion drove her ashore on Jazirat Al Qibliyyah. She had cleared Suez on the thirtieth of May and left the Maritime Security Transit Corridor when she was hit, laden with crude from Novorossiysk for Gujarat. Her position has not shifted and her list has deepened.
Charterer Lens
- Screening a counterparty against a sanctions list no longer covers the exposure. SeaLead went from the world’s thirteenth-largest container line to liquidation inside a year, and the charterers with cargo aboard learned it from the schedule.
- The Caffa ruling puts a court in the position of moving a hull between states over cargo provenance. Where the origin of a parcel is contested, expect disclosure to reach the fixture and the statement of facts.
- Caroline Bezengi has been leaking oil off Oman since June with no owner stepping forward to stop it. Trace the pollution and wreck-removal chain in your own charters and confirm it reaches somebody solvent.
What the Detour Actually Costs
Every route the market found this week works, and every one of them carries caveats. The VLCC bound for Paulsboro gets there, having left part of its cargo in a pipeline and picked it up on the other side of a canal. The boxship reaches its East Coast berth with two and a half feet of draft it is not allowed to use. The barge leaves for Constanta lighter than it was built to load, and the tanker for Novorossiysk arrives three days late because a clearance took three days and no one has explained why. These are not disruptions in the sense the last five months have used the word. They are the ordinary operating conditions of the alternatives, and they express themselves in tonnes short and days lost, which is a different currency from a rate.
That distinction matters because of where those two things get settled. A freight rate is agreed once, in front of everybody, at the moment of fixing. Tonnes short and days lost are argued months afterwards, from loading figures and a statement of facts compiled by people who were not told which draft limit applied on the day, which berth the cargo was meant to reach, or why the ship sat off the Dardanelles from Thursday to Sunday. The freight market itself is in good health, with capesize earnings up a quarter in a fortnight and cargo demand supporting the level. The exposure this week added is not in the rate. It sits in the gap between what a fixture assumed the voyage would carry and what the voyage could physically deliver, and that gap is closed by evidence or it is closed by whoever argues hardest.
Until next week,
The Voyager Portal Team
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