00:00So what we saw over the weekend was there was this initial announcement whereby the Iranians said the Strait of
00:06Hormuz was was open.
00:07This is obviously good news for shipping. We saw a rush of vessels heading towards kind of going from west
00:15to east, looking to exit the Strait of Hormuz.
00:17And we did see a large number of vessels leaving. So when I say a large number, far below normal
00:22transits, we saw about 18 tankers, bulkers and sort of liquid carriers leaving.
00:28We also saw, I think it was about five cruise ships as well, went out in convoy.
00:32But these mainly left between sort of midnight, you know, and early in the morning.
00:38And then after which we saw sort of another announcement from from the Iranians saying, you know, that the straits
00:44were not open.
00:45The US blockade was continuing. And what we then observed through the vessel tracking was a number of vessels was
00:50starting to head, turned back.
00:52We are a long way off returning to sort of normal trade through the Strait of Hormuz.
00:58And I think what's been particularly damaging was that we had a kind of a yes, you're OK to go.
01:03And then it all kind of ground to a halt very quickly, which means next time we get this, people
01:08are probably going to wait a bit longer.
01:09If you're trapped within the sort of the Middle East Gulf, you will make a rush for the exit, as
01:14we saw.
01:14But in terms of vessels going back into the region, potentially to load a cargo of of crude oil or
01:20fertilizer, people will be very, very cautious.
01:23This is very hypothetical right now, but we're talking about months.
01:28So what would we expect at the moment? You know, we've got very low level of transits.
01:32It's very much a controlled voyages. If we, for example, get a kind of a and I think what it
01:37would really take would be like a kind of a formal ceasefire.
01:40We'll start to see maybe a pickup of transits over the course of a month where you maybe see about
01:4525 percent of normal flows.
01:47And that will be kind of big companies, you know, going into load crude oil, many tankers and some more
01:54dry bulk carriers.
01:55And if that continues without hitch, we will then probably after about a month, go into another kind of month
02:01and a half period where you maybe flows.
02:03It kind of be what we call a watch and wait. And you probably see about 30 to 50 percent
02:06of normal traffic.
02:08And that's when you'll probably see the first container ships going through the first LNG carriers going through.
02:13And again, this is if everything continues sort of without incident, without ships being attacked or any kind of further
02:20escalation.
02:21After a kind of a month and a half of that, we will then get to a kind of a
02:24normalization phase,
02:25which we think will probably take another two and a half months after that, where you'll kind of see a
02:31closer return to normal trade.
02:33But I think it's important to say things will not return to the pre-war conditions.
02:37So, for example, your maritime insurance for going into the region will remain higher.
02:42There probably will be a risk premium if you want to do voyages.
02:46Very similarly in that, you know, if you want to trade in the Black Sea, there is a risk premium
02:51on rates there.
02:52There will be a risk premium for the Middle East Gulf.
02:54And I expect that will persist for the long term.
02:58And when I say long term, I mean probably years.
03:19Definitely. And I think there's a couple of ways we can do it.
03:20The first is something like fertilizers, which was kind of being talked about quite recently.
03:25But we're talking about crops that people are either only just planting or even the crop decisions for next year.
03:32So, for example, in the US, farmers are making planting decisions now between corn and soybeans.
03:39Soybeans requires less fertilizers, so they'll probably plant more of it.
03:42In other places, for example, in South Asia, for example, lack of availability to fertilizers will directly impact the volume
03:50of crops.
03:50So that will that that will impact, you know, not not this calendar year, but also next calendar year.
03:58The other one, for example, is is with fuels of diesel shortages have been a big issue.
04:02Again, for example, you know, in Bangladesh, diesel in order to power the irrigation systems.
04:08So that will then impact the crop that is harvested several months down the line.
04:48So the challenge the market has is is there is a lot.
04:50A lot of short term short term effects, but I think there will be there will this will drag on
04:56and certainly we don't expect, as I said, a return to normal trading condition any time in the near term,
05:04even if we do see an end to the conflict, because ultimately merchant shipping is very risk averse.
05:10And I think there is particularly a divergence between the risk appetite of the shipping industry and what a lot
05:16of the the politicians and the ex-military pundits believe the appetite of the shipping industry.
05:22And there is it's actually quite low.
05:25So.
05:52It's very hard to get accurate information out of either, obviously, the Iranian ports and obviously in the Middle East
05:58countries as well are controlling the data flow.
06:01So my understanding is that although there have been attacks on on the ports, the damage to the infrastructure there
06:08is not significant.
06:10However, it's it's when we move up the supply chain, so the damage to energy infrastructure, so and also, you
06:17know, the exports that are going to be coming out so the so the example is with a lot of
06:21the the aluminium industry in the Middle East Gulf, they've had their power supply interrupted.
06:25Now, if you have a forced shutdown of of an aluminium smelter, it takes months to restart it, get everything
06:32up and going, and that's when you have the energy supply.
06:35So, yes, there has been some damage to ports, but I think that is not going to be the bottleneck.
06:40The bottleneck is going to be, you know, everything else getting up, getting getting the rest of the industry up
06:46and running.
07:04But I think also there'll be a reaction from the other economies in the region.
07:07So, for example, the the Gulf countries, Saudi Arabia will they've seen, you know, the vulnerability of of trading via
07:15the Strait of Hormuz.
07:17They will probably look to diversify their their trade routes.
07:21So, for example, for oil, potentially overland pipelines for something like containers, you know, expanding the ports that are outside
07:28of the of the Strait of Hormuz.
07:31So there are things that those countries can do to mitigate. And I think they having seen the, you know,
07:37the events of recent, you know, recent weeks, they will they will definitely invest in doing that.
08:01So, everybody will need something, I don't think coastline is related to, or to, to this place.
08:07So, let's see what happens.
08:08So, for example, there's this here is a helper that accepts such a nurturing way of trading using theدي coast.
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