LONDON, June 2 (Xinhua) -- S&P Global Energy has identified five conditions the market would need to see before considering the Strait of Hormuz commercially reopened, according to a recent white paper.
The report, titled "The Strait of Hormuz: Defining 'Open' in a Complex Market Landscape," says a reopening would require more than a sustained ceasefire. It would depend on the return of functional, "insurable, and sustained maritime traffic under stable and commercially acceptable risk conditions."
Based on consultations across crude oil, refined products and shipping markets, S&P Global Energy said the first condition is a meaningful recovery in vessel traffic. Market participants said traffic should return to 50 percent to 90 percent of prewar levels and remain stable for one week to four weeks. The traffic should include vessels owned or chartered by a broad range of international companies, including oil majors, trading houses and national oil companies.
The second condition is a 30- to 45-day observation period after a declared ceasefire to confirm that hostilities have ended, disruptions have stopped, and maritime traffic can resume safely. The period should allow stranded vessels to leave the region and ships waiting outside the strait to re-enter in an orderly way.
The third requirement is the availability of marine insurance. The report said access to war-risk coverage under commercially viable terms remains a key indicator of normalization. Elevated premiums may be acceptable, but coverage that is highly restricted or prohibitively expensive would not mark a return to normal conditions.
The fourth condition is physical security, including the removal of navigational hazards such as naval mines and the effective operation of maritime security arrangements. The fifth is the normalization of fleet deployment, including the return of Very Large Crude Carriers and other major oil tankers to the Gulf, regular port calls and cargo-loading operations.
Rahul Kapoor, head of Shipping and Metals at S&P Global Energy, said markets distinguish between a technical reopening and a commercial reopening based on restored confidence, lower insurance costs, and safe passage.
Kapoor said more than 800 vessels remain stranded in the Gulf region. The company's modeling suggests shipping activity through the key energy chokepoint is likely to remain below normal levels into the second half of 2026.
The report said vessel traffic through the strait fell sharply after the conflict began. By late May, total traffic had dropped to an average of 11 vessels a day, including fewer than two tankers, down more than 90 percent from prewar levels. ■
