Strait of Hormuz oil flowing back to pre-Iran war levels, Vance says

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Oil flow through the Strait of Hormuz has returned to — and sometimes exceeds — pre-war levels despite lower total traffic after the US-Iran memorandum of understanding pushed Tehran to reopen the waterway, Vice President JD Vance said Tuesday.

“The strait is open in the sense that we’re seeing more oil come out of the strait — and some days even more oil than came out before the war even started,” Vance told The Michael Knowles Show.

Still, he acknowledged that total traffic remains a fraction of the pre-war daily average of between 130 and 150 ship passages.

About 240 ships total transited the strait last week, according to Lloyd’s List data.

“…What the cynics will say is, ‘well, if you look at the number of ships that are trafficking, that’s actually down from the pre-war start,’ but they’re mostly talking about cargo ships and other vessels.”

“At least so far, what we’ve seen is the oil traffic has reached its pre-war height,” he added.

Before the war, around 20 million barrels of crude oil and petroleum products — or roughly 25 percent of the world’s maritime oil trade — passed through the strait each day, according to Encyclopedia Brittanica. 

The phenomenon reflects a divergence between overall maritime traffic and energy shipments, as oil tankers are returning to the waterway more quickly than other commercial vessels. 

On average, shipping companies have remained more cautious about sending container ships, bulk carriers and other non-energy cargo through the strait following the height of the conflict, experts say.

Also contributing to the greater oil flow is the fact that Iran is now allowed to sell energy on the global market after the US waived oil sanctions and lifted its blockade on Iranian ports as part of the US-Iran memorandum of understanding, which reopened the strait after Tehran kept it closed for months during the war.

The Strait of Hormuz is considered one of the the world’s most important oil chokepoints, serving as the primary export route for major Gulf producers such as Saudi Arabia, Iraq, Kuwait, the United Arab Emirates and Qatar.

Its reopening has plummeted prices at the pump following a roughly three-month spike during the war on Iran. Brent crude sold at roughly $73 a barrel on Tuesday, while West Texas Intermediate had prices at about $70 — down from a high of about $120 during the war.

“The world oil economy is kind of getting back into gear, that’s going to take a little bit of time, but you’ve already seen the prices come way down,” Vance said.

Vance said his “biggest frustration” with Republican critics of the MOU advocating for continued war with Iran is that they “don’t realize how completely they were losing the political argument because of what was happening to world energy markets.”

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“Their attitude is just drop bombs and drop bombs and drop bombs, and they can’t really articulate to what end,” Vance said. “What the President is saying is ‘I’m willing to drop bombs’ — and he’s clearly shown that he’s willing to drop bombs — ‘but only if it serves an objective.’

“So what he’s doing right now is taking a lot of pressure off of the world economy … while not giving up a single one of his gains, and while preserving a lot of optionality. I think that’s a very good place for us to be in, but there’s uncertainty because no one can be certain what the Iranians want to do,” the vice president added.