The Strait of Hormuz traffic volume reaches a new high since the war

The Strait of Hormuz blockade shows clear signs of easing. Iran has announced a passage exemption for Iraq. French container ships and Japanese liquefied petroleum gas (LPG) carriers have completed their crossings in succession. As of Friday, the seven-day rolling average number of vessels transiting the Strait of Hormuz had reached its highest level since the outbreak of the Iran-U.S. conflict in late February.

The latest major variable comes from Iraq’s exemption announcement. In a video statement published by the Islamic Republic News Agency (IRNA), an Iranian military spokesperson said that “brother country Iraq” is exempt from any restrictions Iran imposes on the Strait of Hormuz, and that the relevant restrictions apply only to “hostile countries.” If the exemption is implemented, it could theoretically free up as much as 3 million barrels per day in Iraq’s oil freight volumes.

Despite the gradual rebound in traffic, all parties still have doubts about whether the arrangements can be sustained. It is still unclear whether the Iraq exemption applies to all Iraq oil freight and whether it can be effectively enforced; Iraqi officials have also warned that the actual impact of the exemption will depend on whether shipping companies are willing to take the risk of entering the strait to pick up cargo.

Iraq exemption: Potential release of up to 3 million barrels per day

On April 5 local time, an Iranian military spokesperson said in a video statement released by the Islamic Republic News Agency (IRNA) that “brother country Iraq” is exempt from any restrictions Iran imposes on the Strait of Hormuz, and that the relevant restrictions apply only to “hostile countries.”

Iran’s control over the Strait of Hormuz is one of its most important bargaining chips in the current conflict. This exemption statement represents the largest degree of easing in passage arrangements that Iran has made so far.

In theory, the exemption could have a major impact—because Iraq is one of the world’s major oil producers, with daily production tied to an export scale of up to 3 million barrels.

However, an Iraqi official is cautious, pointing out that whether the exemption can truly work depends on whether international shipping companies are willing to send ships into the strait. It is still unclear whether the exemption covers all Iraqi oil or only ships flying the Iraqi flag, and the enforcement mechanism remains to be clarified.

French and Japanese ships break through first; transit volumes hit a new high since the war

Previously, the vast majority of ships that successfully passed through the strait came from countries considered friendly to Iran. The passage of French and Japanese ships marks the first breach of this pattern.

According to Bloomberg data, since early last Friday, a total of 13 vessels have completed the transit—10 departing the Persian Gulf and 3 entering from the high seas. Among the outbound vessels are 5 bulk carriers, 1 product tanker, and 4 liquefied petroleum gas (LPG) carriers.

China Central Television (CCTV) News, citing information from Japan’s Mitsui line, said that one of its affiliated LPG carriers had passed through the Strait of Hormuz before April 4 Japan time, marking the second Japan-related vessel known to have exited the gulf since the blockade. The French container ship CMA CGM Kribi exited the strait last Friday as the first vessel known to be linked to Western Europe to complete the transit since the outbreak of the war.

Turkish Minister of Transport and Infrastructure Abdulkadir Uraloğlu said that since the conflict broke out, a total of 15 vessels owned by Turkish shipowners have been stranded near the strait, with the first granted Iranian permission to pass in mid-March and the second completing the transit recently.

The above transits took place after French President Macron called for a ceasefire and emphasized the need to reopen the strait. However, it is currently unclear whether these transits are the results of government diplomacy efforts or arrangements reached through temporary commercial negotiations by companies and intermediaries.

Five-tier fees; north-south route divergence

Behind the gradual recovery in transit volumes, an Iran-led passage mechanism is taking shape.

According to The Paper, citing sources familiar with the matter, Iran’s Islamic Revolutionary Guard Corps has begun charging “transit fees” to transiting vessels and has established a five-level tiered system based on country relationships: the friendlier the country to Iran, the more favorable the terms; countries considered hostile face risks ranging from threats to potential attacks. Generally, the negotiation starting point for tanker transit fees is about $1 per barrel, paid in RMB or stablecoins. Pakistan has reached bilateral agreements for safe passage.

Sailing routes have also diverged. Most early transiting ships used the northern route closer to Iran’s coastline—i.e., the sea lane between Iran’s Larak Island and Qeshm Island. But more recently, another route has emerged: ships travel along Oman’s coastline, then take the southern waterway of the Strait of Hormuz to head east. The Sohar, an LNG carrier with a 50% stake held by Mitsui in a joint venture company, as well as two other ultra-large tankers, all use this southern route.

At the mechanism level, Iran is drafting an agreement with Oman, planning joint monitoring and coordination of navigation through the Strait of Hormuz. However, Oman has not made clear statements so far.

Uncertainty remains; whether sustainable arrangements are possible needs to be verified

Even though transit volumes continue to rebound, market participants remain cautious about whether the current progress can evolve into a stable arrangement.

Vessel tracking data shows that the Sohar is currently located near Muscat. After changing its destination to Oman’s Qalhat LNG export terminal, the ship appears not to be carrying cargo; it has been loitering within the Persian Gulf for more than a month.

The passage of French and Japanese ships—contrasting with the earlier pattern dominated by ships from countries friendly to Iran—raises the question of whether it signifies a substantive diplomatic breakthrough. However, all parties still have no definitive view. Bloomberg data shows that even though current transit volumes have risen to the highest level since the war, their scale is still small compared with pre-war levels—normally, about one-fifth of the world’s oil and liquefied natural gas pass through the strait each day.

Against the backdrop of ongoing fighting and differing positions among the parties, whether Iraq’s exemption will be carried out and delivered, whether French and Japanese transits can become customary practice, and whether Iran’s fee-taking mechanism can gain broader acceptance remain the core variables that energy markets are closely watching.