New Delhi: Global maritime trade suffered a fresh blow as cargo bookings across the Persian Gulf ground to a halt, amid a military flare-up in the Strait of Hormuz that shattered a fragile June ceasefire.
Bookings had resumed after Iran and the US sued for peace on 18 June. The abrupt pause, confirmed by shipping industry executives, threatens critical supply chains for energy and commodities, at a time when New Delhi was engaged in talks to ensure safe passage of India-bound vessels.
"Shipping lines have put new bookings on hold. Seafarers and shipping lines are concerned about the situation. Details on the condition at ports are yet to be ascertained," said Dushyant Mulani, chairman-elect of Federation of Freight Forwarders' Associations in India, which represents customs brokers across the country.
However, Indian oil refiners are not unduly worried about crude supplies, as India has already diversified energy imports, with West Asia supplying just 20-30% of imports now. Executives at state-run refiners said they have oil and cooking gas till August. Russia is expected to remain the top supplier of crude in the near future, supplying 50% of imports. However, a longer disruption may impact LPG supplies, given that about 90% of India's cooking gas still comes from West Asia.
Securing vessels
Another executive with a shipping company, speaking on condition of anonymity, said that the priority is to secure the vessels stuck west of the Strait of Hormuz, adding new bookings would be "risky". Currently, around nine Indian-flagged ships are present near the troubled strait.
West Asia is a key source for important commodities for India, including crude oil, LPG and LNG, fertilizers and petrochemicals. While India has diversified oil imports, the region still remains a major gas supplier.
The operational freeze follows two consecutive nights of direct exchanges between US forces and Iranian targets. US Central Command confirmed it struck approximately 90 military targets, including more than 60 Islamic Revolutionary Guard Corps fast-attack craft, in response to renewed harassment of commercial vessels. Iranian authorities reported at least 14 fatalities and alleged that retaliatory strikes hit coastal infrastructure near the strategic port of Chabahar, as well as targets near US installations in Kuwait, Bahrain, and Qatar.
On 7 July, a total of 47 vessels crossed the Strait and a large number of these were dark transits, where ships turned off their automatic identification systems (AIS), according to S&P Global Commodities at Sea, largely unchanged from 48 transits on the previous day. According to S&P, only one vessel transited visibly along the coast of Oman. "Overall, 36% of crossings during the day were carried out while operating dark, compared with a July-to-date average of 21%," said a report by S&P, while adding that energy-related vessels accounted for just 38% of total movements, the lowest proportion since 28 June.
In dark transit, vessels switch off AIS, disabling the transponder that broadcasts a vessel's identity, position, and course. It is done to avoid being identified and coming under attacks.
Further, it said that inbound traffic through the Strait of Hormuz in the Persian Gulf made up just one quarter of total crossings, the lowest daily proportion since 12 June. "This disparity suggests significant heightened caution among ship owners and charterers toward inbound transits, although it may also indicate that a greater number of inbound vessels transited the strait while operating dark," said the report.
In February, an average of 135 ships crossed the Strait, which came down to single digits amid the peak of the war. The traffic flow improved after the signing US-Iran peace deal, and reached a high of 94 ships on 24 June.
Restraint call
"India is deeply concerned over the recent attacks and escalation of tensions in West Asia, which have followed fresh targeting of commercial shipping transiting international waterways in the region. These developments risk undermining regional peace, security and stability," the external affairs ministry said in a statement on Wednesday.
"India calls upon all parties to exercise restraint, de-escalate tensions, and ensure protection of civilians as well as the uninterrupted flow of energy supplies and commerce. We urge the parties to return to dialogue and diplomacy to achieve a peaceful and lasting solution to the conflict," the statement said.
An official in the know of the developments said: "Government has accelerated efforts to ensure safety of Indian seafarers and secure India-bound cargoes."
Queries emailed to the ministries of ports and external affairs, shipping lines and logistics majors CMA CGM, DP World, Maersk and Shipping Corp. of India Ltd went unanswered.
Madan Sabnavis, chief economist with Bank of Baroda said: "Global markets continued to show the impact of ongoing conflict between US and Iran. The US president said that further strikes will be launched on Iran. Thus, weaker sentiments prevailed across all asset classes."
Truce over
On Wednesday, the US ended the sanctions waiver on Iranian energy sales, and US president Donald said that the truce is "over", rocking global markets.
For India, which imports about 90% of its crude oil requirements, any disruption in the Strait of Hormuz poses a significant risk. About 20-25% of India's crude imports currently pass through the waterway, down from 60-70% before the conflict began on 28 February. Higher oil prices could fuel inflation and weigh on growth at a time when El Niño and a weaker monsoon are already expected to pressure the economy.
Around 6.50 PM, the September contract of the benchmark Brent crude on the Intercontinental Exchange was trading at $78.14 per barrel, higher by 0.37% from its previous close, as the futures eased the intra-day high of about $79.05 a barrel.
The resumption of conflict comes at a time the government had begun easing supply restrictions for diesel and LPG after Strait traffic resumed.
The Reserve Bank of India last month lowered its FY27 GDP growth forecast to 6.6% from 6.9%, citing rising risks from the West Asia conflict, elevated energy prices, supply disruptions and weather-related uncertainties.
On the macro front, the International Monetary Fund (IMF) on Wednesday projected a global growth at 3% in 2026, flagging further downside risk and also trimmed India's 2026 GDP growth forecast to 6.4% from 6.5%, citing higher energy prices and geopolitical risks.