Shipping in the Strait of Hormuz Nearly Comes to a Standstill! Middle Eastern Energy in Search of Alternatives, LNG Suppliers Resort to Rare Ship-to-Ship Transfers

According to Zhixun Finance APP, despite ongoing tensions between the US and Iran over the vital shipping route of the Strait of Hormuz, suppliers are still working to ensure fuel can continue to be transported from inside the Persian Gulf to global markets. Reportedly, two LNG (liquefied natural gas) carriers appear to be conducting ship-to-ship transfers just outside the Strait of Hormuz. Images captured by the Copernicus Sentinel-2 satellite last Saturday show the LNG carrier Enugu anchored near Sohar, a coastal city along the Gulf of Oman, positioned parallel to another vessel. This arrangement is characteristic of ship-to-ship operations, indicating a possible cargo transfer between the two vessels.

According to vessel tracking data, the Enugu had its Automatic Identification System (AIS) transponder switched on. The vessel is owned by BW Gas LNG Carriers, a subsidiary of BW Group Ltd. Data shows the ship has been circling the Gulf of Oman in recent days. TankerTrackers.com Inc. identified the second vessel as the Mraweh, owned by Abu Dhabi National Oil Co., whose AIS is turned off.

Unlike oil, LNG ship-to-ship transfers are relatively rare and more technically challenging due to the need to maintain the ultra-low temperature of LNG during transfer. According to analysis, if this transfer is confirmed, it could be the first known instance of LNG being transferred from inside the Persian Gulf to another vessel after passing through the Strait of Hormuz.

Go Katayama, lead LNG insights analyst at market intelligence firm Kpler, commented: "This practice allows shuttle vessels to carry cargo from Das Island and conduct transfers outside the Strait, reducing the risk exposure faced by other LNG carriers." He added, "We expect this kind of operation to remain at elevated levels as long as regional security risks persist."

Vessel tracking data shows the Mraweh was last sighted on July 29, located inside the Persian Gulf near the western entrance of the Strait of Hormuz. Last month, the ship entered the Gulf and turned off its signal transmission while transiting the Strait.

A spokesperson for Adnoc Logistics & Services, the logistics unit of Abu Dhabi National Oil Co., stated the company does not comment on specific operational matters, including voyage planning and vessel movements. BW Group also declined to comment.

The latest ship movements show that even though observable LNG transit through the Strait of Hormuz has been virtually stalled since Iran attacked an LNG carrier owned by Qatar in early July, suppliers are still attempting to maintain LNG shipments through the Strait.

According to recent reports, on August 17 local time, Iranian Foreign Ministry spokesperson Baghaei stated that Iran is seriously drafting a maritime route plan with Oman. Baghaei explained that due to the complex security situation caused by actions from the US and Israel, as well as interference and disruptive factors from multiple parties, the drafting of the maritime route plan with Oman has taken considerable time. Despite ongoing route negotiations between Iran and Oman, Iran has repeatedly emphasized that whether this strategic waterway is reopened will depend on whether the US fulfills the obligations outlined in the memorandum of understanding.

With the 60-day ceasefire agreement between the US and Iran set to expire on Monday, shipping through the Strait of Hormuz was nearly paralyzed over the weekend, with no signs of formal negotiations or a new agreement in sight. Data from shipping analytics firm Kpler showed only five cargo vessels passed through the global energy chokepoint last Saturday, and none on Sunday; by comparison, 31 vessels transited during the previous weekend.

Some analysts point out that the US demands the Strait of Hormuz return to its status before the current round of conflict, whereas Iran insists on recognition of its dominance over the Strait—a precondition the US cannot accept. Fundamental differences exist in both parties' demands over the Strait of Hormuz, so with neither side willing to compromise at present, the contest over the Strait is expected to continue for the foreseeable future.