The oil market reacted sharply when a small but meaningful flow of carriers began to transit the Strait of Hormuz, triggering a drop in crude prices on Monday, May 25. Ship-tracking services from LSEG and Kpler reported a trickle of LNG and crude vessels using an Iran-ordered transit route, a move that has relieved a portion of the supply bottleneck that left roughly 20,000 seafarers stranded in the Gulf.
Specific vessels highlighted by the tracking data included the Bahamas-flagged LNG tanker Fuwairit, which crossed the strait on May 25 and was scheduled to discharge in Pakistan on May 26, and the VLCC Eagle Verona, which exited the waterway on May 23 with nearly 2 million barrels of Basrah crude chartered by Unipec. Earlier in the month, two other supertankers — the Chinese-flagged Yuan Gui Yang and the Hong Kong-flagged Ocean Lily — left the strait on May 20 carrying about 4 million barrels in total after waiting offshore for weeks.
Market reaction and near-term outlook
On May 25 the Brent crude benchmark eased by roughly 5.5%, trading around US$97.90 in morning sessions and holding near that level into the afternoon, reflecting a shrinking geopolitical risk premium that had supported prices since late February. Earlier readings during the month showed Brent at higher levels — for example, prices briefly dropped to about US$110.16 on May 20 amid shifting headlines — illustrating how sensitive markets remain to any sign of progress on talks or vessel movements.
Analysts caution that the relief could be temporary. Emril Jamil of LSEG told Reuters that even if negotiations produce an agreement, supply is unlikely to snap back to pre-crisis levels immediately because of logistical delays and lingering distrust among market participants. Meanwhile, commentators from ICIS — Ajay Parmar and Andreas Schröder — have pointed to tighter markets caused by prolonged outages and highlighted Europe’s growing dependence on LNG alongside Asia’s rising influence in global hydrocarbon flows.
Diplomacy, conditions and regional dynamics
The diplomacy behind the movements is complex. US officials said negotiators have a substantive package under discussion: US Secretary of State Marco Rubio described a “pretty solid thing on the table” during remarks in New Delhi on May 25, while President Donald Trump said talks were “proceeding nicely” but urged caution against hasty compromises. At a White House briefing on May 20, Vice President JD Vance said negotiations were “in a pretty good spot here.”
Tehran has struck a more measured tone. Iranian foreign ministry spokesman Esmail Baqai acknowledged agreement on a “large portion of the issues under discussion” but warned against expecting an immediate end to tensions. The IRGC also issued stark warnings that renewed aggression could broaden the conflict outside the Middle East, underscoring the fragile nature of any ceasefire or settlement.
Shipping logistics and trade flows
The vessels now transiting the waterway followed an Iran-mandated transit route designed to control movements through a chokepoint that historically handled about a fifth of global crude and LNG shipments, with up to 140 daily passages before the disruption. Several of the departing VLCCs are linked to Asian energy majors: the Yuan Gui Yang and Ocean Lily carried Iraqi and Qatari supplies destined for Chinese ports such as Ningbo, Shuidong and Quanzhou, while other VLCCs have been bound for South Korea.
Economic ripple effects
The blockade and subsequent market swings have had broader consequences. International organizations have trimmed growth forecasts partly because of higher energy costs and trade disruptions, and developing economies face sharper pain as food and fuel prices bite household budgets. Even with some ships now moving, shipping analysts and traders expect volatility to persist until diplomatic terms are fully clarified and physical logistics normalize.
In sum, the recent clearance of several supertankers through the Strait of Hormuz provided an immediate, measurable easing in oil prices, but experts warn that a durable return to pre-crisis supply patterns will require sustained diplomacy, logistical normalization and time. The market will watch further vessel departures, final terms of any deal and implementation steps from all parties before pricing in a full recovery.
