IRGC Forces Tanker to Turn Back in Strait of Hormuz as Gulf Shipping Costs Soar

Iran's Islamic Revolutionary Guard Corps hailed a tanker transiting the Strait of Hormuz on Monday and ordered it to reverse course or face being targeted, according to the United Kingdom Maritime Trade Operations agency. The incident occurred 11 nautical miles north of Khasab, Oman, and the vessel's master confirmed compliance with the order. No damage was reported, and authorities are investigating. UKMTO advised all vessels to transit the strait with caution.

The confrontation underscores the deepening logistics crisis gripping global oil markets. Persian Gulf producers are paying up to $40 million for tanker shuttle runs through Hormuz, with sailors being offered bonuses of up to $25,000 per trip, according to the Wall Street Journal. VLCC charter rates from the Gulf to China have surged to more than $1.2 million a day, up from roughly $231,000 before the war. Intercontinental Exchange announced two new forward-freight agreement contracts covering voyages from the Gulf of Oman and West Africa, a direct response to the prolonged disruption of Hormuz as the industry's main pricing benchmark.

Despite the shipping dangers, Middle East crude exports excluding Iran exceeded their pre-war average last week, Kpler data showed, with pipelines helping to bypass the strait. Qatar is also moving more LNG cargoes through Hormuz. Kuwait Petroleum Corp. CEO Sheikh Nawaf Al-Sabah said the country is producing just over 2 million barrels per day, roughly 75 percent of its pre-war level of 2.6 million barrels per day. He noted an abundance of crude on the market but a shortage of refined petroleum products, and said Kuwait is exporting a fraction of its pre-war refined product volumes. He called for a focus on moving refined products out of the Middle East Gulf to relieve refinery bottlenecks in the region, adding that several customers have begun sending their own tankers into the Gulf to collect cargoes.