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An aerial 3D illustration render of cargo ships stuck in the Strait of Hormuz. Image: iStock/quantic69
The Strait of Hormuz was effectively closed again April 20, after U.S. military attacked and seized an Iranian-flagged container ship that attempted to get past an American blockade near the strait of Hormuz on April 19, the first such interception since the U.S. blockade of Iranian ports began April 13.
The freedom of cargo vessels to pass into and out of the Persian Gulf via the Strait of Hormuz remained doubtful, as April 20 ushered in a new low in U.S.-Iran relations, with the promised imminent peace talks apparently cancelled.
Last week, Iran and the U.S. appeared to offer conflicting accounts of what “open” even meant.
According to NPR, President Donald Trump said in a social media post at 9:27am U.S. Eastern Time that the U.S. naval blockade on ships accessing Iran will continue, despite an announcement by the Iranian foreign minister less than 45 minutes earlier that the Strait of Hormuz was open.
Iranian Foreign Minister Abbas Araghchi said on April 17 that the passage for commercial ships through the Strait of Hormuz was "completely open" on a coordinated route previously indicated by Iran. Trump initially acknowledged that, but then followed with another message:
"The Strait of Hormuz is completely open and ready for business and full passage, but the naval blockade will remain in full force and effect as it pertains to Iran, only, until such time as our transaction with Iran is 100% complete. This process should go very quickly in that most of the points are already negotiated," Trump said in his characteristic all-caps post.
Meanwhile, business leaders expressed caution about how quickly normal trade might resume.
"The reopening of the Strait of Hormuz during a ceasefire is a positive signal and opens the doors for backlogged shipping routes having some respite,” said Nishith Rastogi, CEO of logistics management software vendor Locus. “However, retailers are unlikely to rush in immediately. Many will take a cautious, wait-and-see approach, weighing the stability of the ceasefire against the risk of renewed disruption before fully committing inventory flows through the route."
“If these corridors remain open, we could see downward prices begin within a few weeks, particularly for fuel-linked goods. However, consumer price impacts may take longer as existing higher-cost inventory works its way through the system,” Rastogi continued in a statement April 17. “The good news is delivery times could improve more quickly. Shipping routes normalizing would reduce detours and congestion almost immediately, meaning consumers may start to see faster fulfillment, provided the situation remains stable."
Trump also said Iran was removing "all sea mines," with the help of the U.S., presumably referring to mines placed in the Strait of Hormuz.
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