Selective Transit, Elevated Costs, and Persistent Attack Risk
After several weeks of conflict, this week’s Allied QuantumSea research provides an overview of the current status of the Strait of Hormuz and the likely next steps as the situation continues to prolong. The strait is neither fully closed nor operating as a normal commercial corridor. A limited number of vessels continue to transit, but flows remain heavily suppressed and shaped by security conditions, political dynamics, and operational constraints.
Current Transit Picture
Windward’s 20 March assessment shows that observed Strait of Hormuz transits have declined by approximately 94.2% from a pre-war average of about 120 per day to roughly 6.9, alongside an 84.4% reduction in large vessels present in the corridor. UKMTO/JMIC reporting from 16 and 20 March aligns with this picture, describing traffic as extremely limited and confirming only a small number of commercial cargo transits over successive 24-hour periods.
Available maritime tracking data indicates that approximately 90 vessels crossed the strait between 1 and 15 March, including 16 oil tankers. This confirms that the route remains physically passable, but volumes are far below normal commercial levels. UKMTO/JMIC also highlights that AIS-based tracking does not fully capture activity due to signal disruption and vessels operating with reduced visibility.
Conditional Access and the Iran-Controlled Corridor
Access to the strait is no longer broadly open and has shifted toward a controlled and conditional model. Windward identifies the emergence of a “permission-based system,” with vessels adjusting routing patterns and, in some cases, transiting close to Iranian territorial waters rather than using standard international lanes.
This has developed into a de facto Iranian-controlled transit corridor centered around Larak Island, where a limited number of vessels are able to pass by operating within or adjacent to Iranian territorial waters instead of standard traffic separation schemes. Passage through this corridor is selective and appears to depend on prior coordination, perceived neutrality, and alignment with acceptable risk profiles.
The use of routing patterns around Larak Island reflects a structural shift in how the strait is functioning. Rather than an open international passage governed primarily by navigation rules, it is increasingly operating as a controlled corridor where access is mediated and influenced by Iran’s geographic position and operational posture along the northern side of the strait.
Diplomatic and Negotiation Picture
Diplomatic activity has intensified, with parallel efforts to enhance maritime security, explore de-escalation pathways, and maintain indirect engagement channels. Discussions include potential frameworks for protected transit, coordinated security measures, and safepassage arrangements for commercial vessels. However, these efforts have not produced a defined mechanism capable of restoring normal traffic conditions. Public signaling remains inconsistent, and there is no indication of an agreement that would materially reduce risk or reopen the strait at scale. Diplomatic engagement is active, but it has not yet translated into operational change.
Insurance, Navigation, and Commercial Friction
Commercial conditions remain a major constraint on transit. UKMTO/JMIC reports that war-risk insurance is still available, but premiums have increased sharply and underwriting requirements have tightened. Voyage-specific approvals and additional premium negotiations are now standard.
War-risk premiums for Gulf transits have risen from approximately 0.25% in peacetime to an estimated 5–10% of vessel value. This cost escalation is a primary driver of reduced traffic, making transit economically unattractive even where physically feasible.
Navigation conditions are further degraded by widespread GNSS, GPS, and AIS interference across the Strait of Hormuz, Gulf of Oman, and Arabian Gulf. These disruptions generate false positioning data, signal loss, and unreliable tracking, requiring vessels to operate with increased caution and reducing the reliability of monitoring data. Windward’s assessment supports this, indicating that traffic analysis remains subject to uncertainty.
Attack Risk and Incident Environment
The threat environment remains active and extends across the broader region. UKMTO/JMIC assesses the maritime security environment across the Arabian Gulf, Strait of Hormuz, and Gulf of Oman as critical, with incidents demonstrating risk beyond the immediate transit corridor.
Reporting for early to mid-March includes at least 20 maritime security incidents affecting commercial vessels and offshore infrastructure. These incidents involve projectile impacts, explosions near vessels, fires, structural damage, and oil leakage. The pattern of activity indicates a sustained and geographically distributed threat environment rather than isolated events.
Energy Infrastructure
The disruption now extends beyond vessel movement into the wider energy system linked to the strait. UKMTO/JMIC highlights risks to port infrastructure, bunkering operations, logistics chains, and energy facilities across multiple Gulf states. Windward reports confirmed impacts at Ras Laffan on 18 March and significant degradation of operations at Fujairah following repeated attacks.
This reflects a shift from a transit disruption to a broader corridor-level impact affecting production, storage, and export capacity across the regional energy network.
Conclusion
The Strait of Hormuz is currently operating as a selective, highly constrained transit environment. Vessel movement continues, but at a fraction of normal levels and under significantly altered conditions. Access is increasingly shaped by a controlled corridor dynamic centered around Larak Island and Iranian territorial waters, alongside elevated costs, degraded navigation reliability, and sustained security risk.
The strait remains central to global energy flows, and current conditions are sufficient to sustain a persistent geopolitical risk premium. Despite increased diplomatic activity, there is no operational framework or agreement in place that would support near-term normalization.
Data Source: Allied