The closure of Hormuz delivered a major shock to tanker markets, but trade adapted through rerouting, longer voyages and greater vessel-day absorption.
Originally published on LinkedIn (opens in a new tab), 1 May 2026.
Tanker rates hit $423,000 a day in early March. That was the headline number the day Hormuz effectively closed and TD3C went vertical.
Three months later they're back near $100k and Hormuz is still shut. The market did what markets do. Saudi crude rerouted through Yanbu. UAE moved barrels to Fujairah. Atlantic cargoes that used to stay in the basin started loading for Asia, sailing around the Cape and adding two weeks to the voyage. VLCC tonnes through the strait collapsed by about a third while tonne-miles didn't.
Frontline just printed its best quarter since 2004. On the call, Lars Barstad said plainly he didn't expect Hormuz to stay closed this long, and didn't expect the market to absorb it like this.
The closure was far from harmless. It was a major shock. But the market response came through rerouting, longer voyages, and vessel-day absorption rather than a clean collapse in trade.
The constraint moved from the strait to the sailing distance. The closure didn't break the trade, but it stretched it.
The lesson I’ll keep for the next crisis: don’t stop at the disruption. Follow the cargo. Trade usually finds a route, and freight prices the extra distance.
VLCC volumes fell as Hormuz disrupted traditional Gulf flows, but longer Atlantic-to-Asia voyages absorbed more vessel time. That has supported freight despite fewer barrels moving — but the effect could unwind quickly if trade routes normalise.
Iran asked ships to pay for passage through Hormuz. Now the US is proposing its own charge for providing security. The bigger concern is not the price, but the precedent: once free transit through an international strait becomes negotiable, the principle itself starts to weaken.
Oil prices are falling as the market prices a reopening of Hormuz, but tanker rates and insurance are telling a less comfortable story. Cargo is starting to move again, yet ships remain scarce and the physical system is still far from normal.