In this month's economic outlook, we are going to discuss what traffic looks like

through the Strait of Hormuz and who has effectively found a way

through, regardless of the geopolitical tensions.

Now, to do this, it's best understood when talking about the Strait of Hormuz and

the subsequent closure, that it's really a series of events

rather than one key conflict. The corridor through which

a fifth of global oil transits hasn't really gone through one

crisis. It's really been a five-phase whipsaw.

We've had a full-scale conflict, a prolonged dual blockade, fragile

diplomatic recovery,

renewed collapse, and throughout all of this, what we can do is we can actually use

satellite AIS vessel-tracking data to

track daily transit activity through the strait itself.

Now, it's really clear that tanker movement has collapsed.

This is something that has been discussed quite extensively, and then, of

course, we have heard quite a lot about it with the volatility in the

oil markets,

as well as broader commodity markets as well.

But when we tease out the data, we start to see that there's even more information

that we can glean from the closure than just tanker data has

collapsed. When we break it down by transit by vessel types, for

example, we see a very clear split.

We have dry bulk and general cargo vessels that have proved much more resilient

than tankers. Also, container ships and ro-ro

carriers. They've really climbed off the floor sooner.

They've also reached higher levels with each partial reopening.

Now, that gap was actually sharpest during the June peace deal, with both

categories surging well ahead of the rest.

And general cargo, in particular, has stayed the most elevated of the five ever

since. Part of this is due to diplomatic relations.

So dry bulk and general cargo, they showed more movement post-conflict than the

others because they carried cargo that Iran had explicitly

exempted in late March, since roughly a third of

global fertilizer supply moves through Hormuz.

And so a UN task force was actually formed specifically around getting fertilizer,

as well as grain, moving ahead of the planting season.

So what that did was it gave dry bulk, it also gave general cargo,

a legal pathway to get through the Strait of Hormuz that the other vessel

types did not have.

But when we take it even one step further and break down the data by

port surfaces, something genuinely interesting also surfaced, and it's

that ports that don't require passage through the strait at

all, saw meaningful, sustained drops in traffic.

This is really interesting, right?

Compare that to Jeddah on South Arabia's Red Sea coast, which

saw increased traffic. Two ports with no physical need to

cross Hormuz, two very different outcomes.

Now, what this tells us, because we did see a fall in

ports that don't have to pass through the Strait of Hormuz but are quite close to

it, tells us that the shock propagated through regional conflict

risk pricing and insurance markets, not just

physical chokepoint closure. And so what does that tell us?

That tells us that the reopening of the Strait of Hormuz is not going to be an

immediate return to normal. It's going to take quite a bit of time for

insurance and risk premiums to reassert themselves and for the logistical

network to return to more of a

past trajectory, if it ever does. When we take one

last insight that I'm going to mention, is that

when comparing two ports in the same emirate, so

we see that Dubai's traffic, nearly 70% general

cargo. Jabal Ali is 56% container.

Despite sharing a government, a currency, and

identical geopolitical exposure, we see that Dubai recovered to

80% to 100% of baseline by mid-2026, while

Jabal Ali stagnated in the 10% to 20%

range for most of the same period. The clearest

difference between them is what they carry and how flexibly it can move.

So general cargo mostly travels on smaller voyage

charters, chartered ships that can divert port to port, while container

traffic runs on larger vessels, normally locked into more

fixed global routes. Now, that distinction, not

port identity, not nationality, looks like a key

driver of who came back online and when.

Now, all of this to say that the Strait of Hormuz crisis is best understood

not as a single closure event, but as a test in

supply chain resiliency and responsiveness.

And what it really brought to the surface was what type of goods

and how they're moved can respond in what timeframe.

And so as we look to the future, it's very unlikely that

geopolitical volatility

is episodic. As we talk about

2026 and beyond. So the conversation really has to transition

to what can we do to mitigate our risk in this

environment. I hope that you found some of this data insightful and useful, and I

look forward to talking to you again soon.