By Kanoko Matsuyama, Tsuyoshi Inajima, and Yusuke Maekawa
(Bloomberg) – Jotaro Tamura, the CEO of Mitsui OSK Lines Ltd., a Japanese shipping company, believes that disruptions in the Strait of Hormuz will last longer than initially expected. Recent attacks have increased the risk for oil tankers navigating through this crucial shipping lane.
In a recent interview, Tamura stated, “Given the current situation, it's hard to imagine operations starting back up by the end of the year. The risks are higher than we can accept right now.”
Tensions between the US and Iran over control of the Strait of Hormuz have escalated after a period of relative calm. This has raised the danger for vessels transporting crude oil from the Middle East to global markets. After the war began, cautious Japanese shipowners began moving their vessels out of the Gulf and have generally avoided the area for safety.
As a result of these disruptions, Japan’s oil refiners, who used to import over 90% of their crude from the Middle East before the conflict, have had to find new sources and routes, including imports from the US. They are also relying on their stockpiles to prevent shortages and price increases.
Mitsui OSK had initially planned for a gradual return to operations in the Strait of Hormuz, starting in October, with a full resumption by January. However, Tamura mentioned that this schedule is now likely to be delayed, stating, “The resumption of crossings is likely to be pushed back, but it’s hard to say by how much at this stage.”
While Japanese tankers have largely stayed away, some vessels have continued to transit the Strait of Hormuz in recent months, occasionally turning off their transponders to avoid detection. According to estimates from oil traders, about 6 million to 8 million barrels of crude were passing through the strait daily last week, although this was before the latest attacks.
For Mitsui OSK to resume normal transit operations, Tamura indicated that the company needs assurance that safe passage can be maintained over several voyages, rather than just evaluating risks on a ship-by-ship or day-by-day basis. He added that operating with transponders turned off should not become standard practice, as this implies that ships are prepared for potential attacks.
On a more optimistic note, as Japanese refiners seek out diverse crude supplies, new opportunities are emerging for the nation’s shipping companies. Tamura noted that Mitsui OSK is experiencing increased demand from the US and West Africa. This sentiment was echoed by Takaya Soga, the CEO of rival Nippon Yusen KK, who recently revealed that the company is in discussions with refiners to help import oil from Latin America and Africa.