Hormuz traffic slows to near zero as a make-or-break deadline falls today

Traffic through Hormuz has all but stopped. Just five commodity vessels made the crossing on Saturday and none on Sunday — against 31 the weekend before and a pre-war norm above 130 ships a day, Gulf Business reports, citing ship-tracking data. Even allowing for tankers running dark, the waterway that carried a fifth of the world’s seaborne crude and LNG before February is once again effectively shut.

The ceasefire memorandum deadline today is the immediate pressure point, and there are no signs of resumed talks despite efforts by Pakistan last week to push Iran back to the negotiation table.

Meanwhile, Iran and Oman appear to be working again on a framework for managing traffic through the strait, after agreeing on shipping routes through the waterway, Iranian Foreign Ministry spokesperson Esmail Baghaei told state-run Defa Press. The shipping map would form part of a broader agreement intended to preserve both countries’ sovereignty and provide safe passage for vessels.

The difficult bits are still unresolved: Further talks are planned, with Tehran yet to disclose how vessels would be protected or whether they would face transit fees. The proposed framework would govern how traffic moves through the strait, but would not by itself reopen the waterway, Bloomberg reports, citing Iranian Foreign Minister Abbas Aragchi.

Reopening Hormuz still depends on the US meeting separate Iranian conditions, Aragchi said, noting that “we have not yet made a decision to resume negotiations with the US.”

Washington sees it differently: A US blockade of Iranian ports was a “wall of steel” that enabled Washington to effectively govern Hormuz, US President Donald Trump said (watch, runtime: 1:05:26), adding that “pretty soon I’ll be declaring the Hormuz strait a territory of the United States.”

The attacks continue

Strikes continued against shipping and oil infrastructure in both the Arab Gulf and the Red Sea. Two Adnoc vessels were struck while transiting Hormuz on Thursday, while a third was hit on Friday. No injuries were reported. And on Saudi’s western coasts on the Red Sea, the Houthis are not letting up, hitting Aramco’s 400k bbl / d Jazan refinery with two drones last Thursday, the second attack on the facility in under a week. Another Aramco facility in Najran was also allegedly targeted on Friday night.

REMEMBER- Jazan was already offline. Aramco shuttered the refinery on 27 July after a Houthi strike damaged its IGCC complex and tank farm, and repairs were expected to be complete by 15 August, with some reports putting the date at 30 August. It’s unclear what Thursday’s strikes have done to that window.

The commercial damage for Aramco is real: The company is handling September crude allocations to some Asian term customers on an ad hoc basis, abandoning the monthly OSP-then-allocation cadence that has structured the Asian crude trade for decades, Reuters reports, citing unnamed sources. And it gets worse: Ship owners are refusing both Hormuz and the Red Sea cargoes, jeopardizing both of Saudi Arabia’s main export ports.

Qatar turns the LNG taps back on

Qatar is getting Ras Laffan moving again, but it still needs Hormuz to reopen if it wants to get product to market. LNG loadings from the giant export complex climbed to their highest last week since March, with the 10-day moving average reaching roughly 80k tons, Bloomberg reports, citing ship-tracking data. This is still 60% below year-ago levels, but it’s the strongest recovery signal since Iranian strikes forced the shutdown. Qatar has moved little LNG through Hormuz since attacks on shipping resumed last month, and getting back to normal export volumes now depends more on conditions in the strait and less on how much gas the plant can produce.

The market can use these volumes: Asian spot LNG prices are running at roughly double pre-war levels, while European gas prices have surged as the region tries to rebuild inventories ahead of winter.

IN CONTEXT- LNG has much less room to reroute than oil. LNG relies on fixed liquefaction, shipping, and regasification infrastructure for exports, leaving little room to improvise when a route goes down. Gas markets also lack strategic reserves or a quick supply response, making disruption harder to absorb.