Security risks persist for ships in the Strait of Hormuz with GPS jamming incidents stifling transits through the key waterway, despite a tentative ceasefire between Israel and Iran.
Angeliki Frangou, CEO of Greece-based Navios Maritime Partners, stated to CNBC: “We have had about 20 per cent less passage of vessels through the Strait of Hormuz, and vessels are waiting outside.”
“You are hearing a lot from the liner [ocean shipping] companies that they are transiting only during daytime because of the jamming of GPS signals of vessels. They don’t want to pass during the nighttime because they find it dangerous. So it’s a very fluid situation,” Frangou continued.
According to an estimate from the Maritime Information Cooperation & Awareness Centre, an average of 970 ships per day experienced GPS interference in the week preceding 20 June, reported CNBC.
The outlet also cited data from shipping intelligence firm Kpler, which showed a decline in overall vessel traffic through the Strait of Hormuz between 13 June and 22 June. This analysis was based on Maritime Mobile Service Identity (MMSI) data for all ships and tankers in the area. Each MMSI is a unique nine-digit number used to identify, track, and communicate with vessels.
On 13 June, the number of unique MMSI signals recorded for all types of vessels was 16,127, which dropped to 7,947 by 22 June. For tankers specifically, the unique MMSI count declined from 1,120 to 889 over the same period.
READ: Maritime industry braces for Iran-Israel conflict impact
Frangou noted that the Strait of Hormuz narrows to just 21 miles at its tightest point, making GPS signal jamming a particularly serious concern for navigating ships.
“This is very important for the safety of the crew and the vessel,” he added. “Safety conditions are something that is at the forefront of our minds. This is why we are constantly monitoring all this,” she added.
Moreover, security concerns in the Strait have subsequently spiked both insurance premiums and ocean freight rates, CNBC reported. According to data from freight analytics firm Xeneta, spot rates from Shanghai to the UAE’s Port of Khor Fakkan have surged by 76 per cent since mid-May, with average rates now reaching $3,341 per FEU.
While Khor Fakkan lies outside the Strait on the Indian Ocean coast of the UAE, its strategic location makes it a key transshipment hub for trade routes serving the Arabian Gulf, Indian Subcontinent, Gulf of Oman, and East Africa.
Unlike ships that can reroute around the Red Sea to avoid Houthi attacks, a disruption that began in mid-December 2023, vessels bound for ports beyond the Strait of Hormuz have no viable alternative, highlighting the higher stakes in play for the future of regional and global shipping.
“The reality is that yesterday [23 June] we saw that rates doubled on the passage,” Frangou added. “This can change quickly, but what we have seen is that when they go up, it’s more difficult to bring them down.”
Earlier this week, the US government urged China to use its influence to prevent Iran from closing the Strait which is responsible for roughly 20 per cent of the world’s oil and gas trade.
