Schrodinger’s Hormuz

Shipping has spent five months trading a geopolitical light switch. Hormuz has been opened and closed at least half a dozen times since February, and each new arrangement has bought enough movement to raise expectations without lasting long enough to restore confidence. The 17th June MoU flicked the strait open, three weeks later attacks shut it again, and the brief late July pause ended when Iran fired on US forces on 28th July. For LPG, the question is no longer whether the strait is open today, but whether it will still be open when the next ship gets there.

The pattern was set well before June. Between 11th and 18th March, 13 LPG transits were recorded, 11 of them outbound, as India negotiated Shivalik and Nanda Devi through with 92,712 tonnes of LPG behind a naval escort. April added 18 more between the 2nd and the 7th as ceasefire talks went public and Iran began granting selective passage, then Tehran declared the strait open on 17th April and shut it the next day amid the US blockade. The next real burst came between 10th and 16th May, when 26 LPG transits were recorded, 16 outbound, following the launch and near immediate pause of Project Freedom and India separately walking Symi and NV Sunshine through around the BRICS meeting in Delhi. Every opening was smaller than the political noise around it.

The 17th June US-Iran framework produced by far the largest movement since the war began as the US-supported southern Oman corridor was also scaled up. From 17th June to 7th July, 51 LPG transits were recorded, split almost evenly between 27 outbound and 24 inbound, while 25 individual LPG vessels made it out and Al Salam and Zakher each crossed eastbound twice. All-vessel traffic still averaged only 37 transits a day, compared with 105 in 2025, so the improvement was significant but still well short of pre-war levels. Attacks returned on 6th and 7th July, as Trump called the truce over on 8th July, and between 11th and 28th July only 10 LPG transits were recorded as total traffic fell to around 10 per day. The latest pause produced 27 transits over 3 days, only one of them LPG and inbound, before the fighting resumed.

The original queue has at least cleared. Thirty-five LPG vessels were inside the Gulf when the war started and all have since escaped. Five are back inside today, attempting to trade a volatile market. The problem is no longer getting the original fleet out, it is whether owners will keep sending ships back often enough to clear the cargo backlog behind them, and the evidence says a small group is doing the work for everybody else. Al Salam, Tara Gas and Seabus each lead the VLGC fleet transits with six crossings since March. Access is there but in most cases they are either Iranian affiliated or older ships willing to take the risk. Broad fleet confidence is still uncertain.

The public LPG casualty list is short, and that is part of the problem. Gas Al Ahmadiah was hit off Fujairah on the night of 16th March, but the ship was empty and at anchor 23 miles east of the port. The investigation pointed to falling debris from an air defence interception rather than a deliberate strike, however unlikely that may be. The other case is Disha, the sanctioned LPG tanker broadcasting as Lavine under a purported Mozambique flag, disabled on 24th July. CENTCOM says its forces fired into the engine room in the Gulf of Oman after the crew ignored repeated warnings and tried to breach the blockade several times. The strike had reportedly hit the accommodation block in Iranian waters. The vessel had been under OFAC sanctions for two years and had previously moved Iranian LPG to the Houthis.

Neither case is a mainstream owner punished for a legitimate voyage, and owners will continue attempting transit, whether having got permission through Iran or not.
According to market rumors it took around 3 weeks to get a PGSA permission for a transit, but clearly not every ship has requested one. Only recently, a tanker was struck northeast of Limah on 20th July and abandoned to a lifeboat, another had its steering gear damaged off Dibba the night before, and the IRGC forced four ships in the southern strait to halt over 24 hours on 24th and 25th July.

June’s ceasefire allowed the ships that were stuck at anchorages to get through, which totalled to around 25 LPG transits. However, it was already closed by the time any owner decided to ballast to the AG. Iran’s foreign ministry says the strait’s status is unchanged and that its only negotiations are with Oman, not the US. Add the unresolved question of transit fees and Hormuz remains as it has been for the past five months, open to whoever Iran decides to let through on the day. Hormuz therefore remains both open and closed, like Schrodinger’s cat, with its condition determined by what happens before the next ship arrives. With neither US nor Iran’s positions budging toward a unified framework for transits, the market is learning to move in the gaps created by temporary ceasefire.