Vessel visibility collapses in Strait of Hormuz as trade risk escalates

Maritime visibility in the Strait of Hormuz and Gulf of Oman has deteriorated sharply, creating fresh operational, insurance and compliance risks for commodity trade.

As many as 470 vessels in the region were affected by GPS jamming as of 5 May, while only around 10 of more than 100 vessels in the Fujairah anchorage area were transmitting visible AIS signals. The disruption follows attacks on UAE-linked energy infrastructure and vessels, adding to concerns that commercial shipping conditions around Hormuz are becoming structurally less stable.

The impact is already visible in energy flows. Oil and fuel exports from Fujairah reportedly fell from a 30-day average of 3.5mn to 4mn barrels per day to around 500,000 barrels on 5 May, while UAE crude exports are running below half of their 10-year seasonal averages.

For trade finance, the issue is no longer only price volatility. Reduced vessel visibility affects shipment tracking, insurance pricing, sanctions screening, cargo risk and lender confidence. If ships cannot be reliably tracked, banks and insurers face greater difficulty assessing where cargo is, who controls it and whether transaction conditions are being met.

The result is a more difficult environment for commodity finance, with higher risk premiums and more caution around energy-linked transactions.