Frontline CEO Lars Barstad stated that oil tanker traffic through the Strait of Hormuz should quickly increase if the U.S. and Iran reach a credible deal, particularly one that improves security in the strategic sea lane [1]. Barstad noted that Gulf states are eager to boost oil exports, and some shipping companies have already positioned tankers near the region in anticipation of a potential reopening of Hormuz [1]. However, he emphasized that Frontline itself has not positioned vessels for this scenario [1].
Currently, five of Frontline's 80 tankers are stuck in the Persian Gulf due to the closure of Hormuz, and only five to ten ships are transiting the strait daily, compared to prewar levels of 130 to 140 vessels per day [1]. Barstad explained that about 10% of the world's very large crude carriers (VLCCs), each capable of carrying up to 2 million barrels, are stuck in the Gulf loaded with oil and would likely be the first to exit if the strait reopens [1].
Barstad expressed optimism that shipping transits would resume quickly if the U.S. and Iran reach an agreement, even if it is only to avoid attacks on shipping [1]. However, he cautioned that the security situation remains volatile, with President Donald Trump threatening further military action against Iran and stating that a deal was just days away [1]. Barstad also warned that shippers may eventually redirect their vessels elsewhere if a deal does not materialize [1].
The CEO's comments highlight the significant pent-up demand for oil exports from Gulf states and the commercial incentives for shipping companies to be prepared for a reopening of Hormuz [1].
CONCLUSION
The potential for a U.S.-Iran deal has created cautious optimism among oil tanker operators, with expectations of a rapid increase in Hormuz traffic if security improves. However, ongoing volatility and uncertainty around negotiations mean that market participants remain watchful, and some may eventually redeploy assets if a breakthrough is not achieved.