The situation in the Strait of Hormuz remains precarious for shippers — traffic is still moving at far below pre-war levels despite a clear rebound in recent days — as companies assess threats and counter-threats between the US and Iran over the weekend.
Independent traffic service MarineTraffic reported Monday that 71 confirmed transits were recorded over the previous three days among ships that left their transponders on (a signal “pointing to improving confidence”). Before the war began, 100 ships often made passage in a single day.
“Diplomatic uncertainty continues to weigh on the recovery,” MarineTraffic wrote.
Indeed, Iran’s Revolutionary Guard declared on Saturday that the waterway would be closed, and President Trump responded with threats of renewed military action, once again suggesting that the US could take over the strait and levy its own tolls.
Read more: How to protect your money as Mideast turmoil fuels market volatility
Vice President JD Vance gave an update on peace talks in Switzerland on Monday, saying “we laid a very good foundation for a successful final deal.” He again affirmed that the strait remains open and that new mechanisms to address issues such as mining have been set up as Iran also offered optimistic commentary saying “major progress” had been made.
Yet “strait jitters” remain, Thomas Mathews, head of Asian markets for Capital Economics, wrote in a note Monday, saying that renewed tensions “have caused a bit of concern in markets at the start of the week.”
Vice President JD Vance speaks to reporters on Monday before boarding Air Force Two to return to the US after after a round of peace talks held at Emmen Military Air Base in Switzerland.. (Nathan Howard / POOL / AFP via Getty Images) · NATHAN HOWARD via Getty Images
Raymond James noted that strait traffic had decreased on Sunday after Iran’s threats to close the waterway.
“There is a long way to go until a durable peace is struck,” analysts wrote.
A weekend of increasingly bellicose threats
The crucial Hormuz waterway — where one fifth of the world’s oil passed before the war — was a top issue in ongoing peace talks that got underway on Sunday, with a senior US diplomat acknowledging that “confusing messaging” on the strait was an element of the talks.
The talks in Switzerland, led by Vance and mediated by Pakistan, lasted into Monday. Vance is now heading home but promising that technical teams will continue negotiations over the weeks to come.
A satellite image of the Strait of Hormuz is seen on June 16. (Maps4media via Getty Images) · maps4media via Getty Images
But those talks take place amid increasingly bellicose rhetoric from both sides.
Iran’s fledgling Persian Gulf Strait Authority — the body meant to eventually collect fees to manage traffic — claimed on Friday that ships must “submit compliant transit requests” to pass through the waterway during the ceasefire but said no fees would be assessed for now.
On Saturday, Tehran’s Islamic Revolutionary Guard Corps declared the waterway shut due to the fighting in Lebanon. That threat appears to have slowed traffic on Sunday — but not stopped it — with US Central Command quickly responding that “safe passage through the international waterway remained intact.”
President Trump also made a series of social media posts over the weekend claiming that “oil is gushing” and that Iran won’t impose tolls but the US might.
He went further on Sunday, telling Fox News, “We may take over the strait if we have to. I’ll blow the shit out of them.”
As he addressed reporters before returning to the US on Monday, Vance downplayed the threats from both sides as “trash talk” but acknowledged that the Iranians “did threaten to walk out, or at least there were social media threats that they would walk out, but we were negotiating well past 1 in the morning yesterday.”
President Donald Trump waves as he arrives at Joint Base Andrews in Maryland on Sunday after returning from Camp David. (Kent NISHIMURA / AFP via Getty Images) · KENT NISHIMURA via Getty Images
Meanwhile, conditions on the ground remain tenuously positive for now.
Trade analytics firm Kpler reported that Qatar had sent four liquefied natural gas tankers into the Strait of Hormuz on Monday in spite of Iranian claims it had closed the waterway.
Energy markets also offered a positive assessment of developments with crude oil prices down on Monday and below $80 per barrel with the Trump administration touting that “really big tankers” were making passage. Also on Monday, the Treasury Department formally lifted sanctions on Iranian oil until August 21st.
Gregory Brew, a senior analyst for Iran and oil at the Eurasia Group, observed that the traffic situation is “still subdued compared to pre-war level, but ships are still moving through.”
“Iranians have not yet taken action to enforce their announcement (apart from threats),” he added.
This story has been updated with additional developments.
Ben Werschkul is a Washington correspondent for Yahoo Finance.
Read the latest financial and business news from Yahoo Finance