No signs of diplomatic off-ramp to war as regional shipping and aviation struggle

The long weekend was marked with infrastructure attacks, more attempts to reopen (or muscle through) the Strait of Hormuz, and mismatched diplomacy signals.

The state of diplomatic play remains up in the air, as the Pentagon is reportedly expectedto dispatch thousands of soldiers to the region and potentially inside Iranian territory. The reports come as mediators from Egypt, Turkey, and Pakistan want to set up talks between the US and Iran by Thursday, though a diplomatic divide remains between Washington and Tehran. Meanwhile, resolutions are under discussion at the UN Security Council over commercial shipping activity and the closure of the Strait of Hormuz, with Bahrain hoping to push for UN-backed action.

While Hormuz remains largely closed, Tehran has begun hand-picking which vessels — and which countries — can pass. Iran is shifting from a total blockade of Hormuz to a mode of selective transit, with at least three vessels struck while attempting to pass through the strait over the long weekend. These attacks have forced ships to “hug” Iran’s coast while transiting, which allows Iran to use visual identification in lieu of radar stations knocked out by US strikes.

Who’s been able to get through: Vessels from India, Pakistan, and Greece, alongside Iran's own oil fleet, have been tracked taking unusual routes around Larak Island to navigate the strait. At least nine Chinese Cosco-linked tankers are currently amassing north of Abu Dhabi, likely awaiting cleared passage given Beijing’s role as the primary buyer of Iranian oil. Iran’s Foreign Minister has signaled readiness to let Japanese-related vessels pass following direct talks with Tokyo.

Iran is soft launching a new pay-to-play model: For those not on the list of enemy-linkedvessels, passage now could carry a steep USD 2 mn transit fee per vessel — a move Iranian lawmakers say reflects a new concept of sovereignty for Iran.

The aviation industry is still scrambling

Global airlines are continuing to avoid the region. European carriers extended suspensions of flights well into the summer, and in some cases even later than that. Lufthansa Group airlines — including Lufthansa, SWISS, and Austrian — suspended flights to Dubai until 31 May, and Abu Dhabi until 24 October. Other airlines that have made similar moves include KLM, Cathay Pacific, Singapore Airlines, and British Airways.

Regional carriers that faced near-zero occupancy in the first days of the war are beginning to pick up again, although with different strategies and mixed results. Some airlines are doubling down on domestic routes and others are moving their operations to neighboring countries to keep their fleets moving. Some carriers, meanwhile, are hitting a (temporary, partial) pause: Qatar Airways is reportedly parking several planes in Spain as they remain out of use and the airline is one of many “looking for safer places to park their planes.”