Bottlenecked: Trapped in the Strait

This comprehensive look at the maritime crisis in the Strait of Hormuz connects the long-term economic vulnerability of global seafarers—whose salaries have been systemically depressed by globalized labour pools and Flags of Convenience—with the high-stakes logistics of a modern conflict zone. Roughly 20,000 seafarers have spent months trapped aboard 500 stranded commercial ships following the closure of the chokepoint. A preliminary mid-June 2026 US-Iran peace framework has attempted to prioritise human welfare over cargo, prompting the International Maritime Organization (IMO) to execute an engineered evacuation plan. However, this rescue remains bottlenecked by a 40-to-50-day mine-clearing timeline and a legal battle over Iran’s prohibited attempt to impose permanent transit tolls on an international strait legally guaranteed free "transit passage" under UNCLOS. While speculative oil prices tumbled instantly into the $80s on peace headlines, maritime underwriters are holding war-risk insurance premiums at an astronomical 4% to 10% of hull value. 

Barry discusses the human crisis behind the Hormuz negotiations, the effects on seafarers and the roadblocks the IMO hope to smash to ensure that the human custodians of our maritime trade remain in good physical and mental health.

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Transcript

SPEAKER_00 0:00

Hey, very warm welcome everyone to the Maritime Education Podcast. My name is Barry Sadler. Welcome back if you are one of our lucky subscribers. And if you're here for the first time, and a special warm welcome to you. I'm sure you'll find the subjects that we talk about here at the Maritime Education Podcast both informative and entertaining. As I'm sure a lot of you are aware, Donald Trump has announced a peace deal between the US and Iran, which was announced by the mediators Pakistan on Sunday. And I want to talk in this podcast about some of the potential human effects of this peace deal, other than of course the obvious effects that are happened on a humanitarian front with no bombing. But I want to talk about the ships in the Gulf and in particular those seafarers that are stuck on those ships. The seafarer crisis in the Strait of Hormuz has gone on now for months, ever since the US and Iran went to war. This morning on Radio 4, I listened to an interview with Arsenio Dominguez, who of course is the Secretary General of the IMO, where the interviewer on Radio 4 was talking about the possibility of opening up the Straits of Hormuz in a reaction to the signing of the deal. Now, President Trump said on Monday that the deal is all signed, but the full text will not be issued, it will be issued pretty soon, and uh he's also suggested that it could be uh released uh once or two parties have formally signed the deal, which would happen in Switzerland, but in the meantime he was confident that the Straits of Hormuz would reopen. This means that the media has focused on that, not focused on that because of seafarers, of course, but focused on that because of the geopolitical effects of having oil flowing once again through the Straits of Hormuz. But I was really impressed with the Secretary General this morning as when he was questioned by the interviewer at Radio 4, he didn't go down the path of simply talking about economical effects, the price of oil, and getting the ships flowing again through the straits from a cargo operational perspective. He kept saying the word seafarer and he kept saying the word safety. He wasn't drawn into the geopolitical economic side of it. He was there to talk about the safety of ships transiting through the Straits of Hormuz. Now, let's assume that the deal is signed in Switzerland this week and uh everything goes uh nicely according to plan. I know we've been here before, deals have attempted to be signed over the last couple of months, have fallen through. But let's be positive, let's assume that this deal will be signed this week in Switzerland and the Straits of Hormuz will start to open. Let's look at the human effect of that. Let's look at the effect on the seafarers that are trapped inside the Straits of Hormuz. Now, the reason the Straits of Hormuz are mainly closed is twofold. One because of the very high insurance premiums, and we will talk about that a little bit later on, but also because of the threat of mines and that the ships don't want to transit with that threat still there. The Iranians have stated they have mined the southern edge of the Straits of Hormuz, meaning that to avoid the mined areas, ships have to pass along the northern route out of the Straits of Hormuz, and that means passing through Iranian territorial waters, and therefore Iran is exerting control on ships in this way. Now, the IMO doesn't have an official verified confirmation that the strait has actually been heavily mined yet, and so step one following the US Iran memorandum of understanding is to send assets into the area to physically verify and evaluate the state of the waters, particularly the waters through the traffic separation scheme of the Strait of Hormuz, which is on the southern edge, which runs through Oman territorial waters. This is the area that the Iranians claimed to have mined. You may have seen in the UK press this morning that Keir Starmer has said that the U the UK will be actively involved in the opening of the strait. And I think he's shortly going to announce that United Kingdom ships will be allowed to enter the straits in order to verify the mine status of the route and attempt to identify and diffuse those mines. Now, the scale of the bottleneck is huge, as we've talked about in previous podcasts, in that before the war there were around 130 ship transits per day. That's gone down to almost zero now, and it's estimated by the IMO that there are over 500 ships trapped on the other side of the Straits of Hormuz, trapped on the Gulf side of the Straits of Hormuz. Now, all of these ships are of course manned by seafarers, and it's those seafarers that are currently suffering. I'm going to move on to talking about seafarers in a minute, but just a couple of other things that the Secretary General General of the IMO, a couple of other points that he made this morning. One is that when the Straits of Hormuz opens, those tankers, particularly those tankers that have been laden with crude oil for some weeks or even months now, but trapped, may rush to exit the Gulf and get their cargoes delivered to minimize the economic effect to the ship owner. Now this is going to create a risk in a in a rush through the straits, and the Secretary General is very, very concerned that if this risk is unmanaged, that the exodus of ships, the sheer number of ships trying to use the strait, may result in collision situations developing as ships jostle, one for position and two to avoid those areas where hopefully mines will have been detected and warnings put out. That's a very real scenario in that if lots of those 500 ships try running for it, then you're going to have lots of ships in a very confined waterway. Now, if the traffic separation scheme was open, so if the southern part of the Strait of Hormuz was open, those ships would comply with Rule 10 traffic separation schemes, they would hopefully proceed in your general direction of traffic for that lane. However, the sheer volume of them crammed into that traffic separation scheme may bring ships into close quarters situations with one another and therefore increase the collision risk. Now the traffic separation scheme which is co-managed by Oman and uh and Iran, but most of it lies in Oman territorial waters, uh, stems all the way back to 1968. That's when that scheme uh was adopted by the IMO. So it's been there uh for longer than I've been on this earth, which is quite some time. Um but you know this basic traffic separation scheme is there to help traffic leave and arrive, of course, in an orderly fashion. But the downside of it is it does bring traffic into a narrow lane, which uh which brings it, as I say, into very close proximity to other vessels, may develop close quarter situation and their risk of collision. The other point made by the Secretary General was that of um a toll. Now Iran has floated the idea that once the Straits of Hormuz are open, it's going to exert a toll on ships to come through, and um Dominguez explicitly calls this a violation of UNTLOS, the United Nations Convention on the Law of the Sea, saying that because this is an international navigational strait, that there is no legal avenue to introduce tolls or fees in these straits. Now UNTLOS basically defines neutral choke points like HUMAS are international straits for navigation and therefore ships using those straits for navigation are guaranteed a transit passage. This means that ships cannot be charged for the right to pass, innocent passage, which is slightly different, but must be afforded to ships that are transiting through international straits. So we've got the Straits of Dover, for instance, which is the choke point between the southeast coast of the UK and uh the northern coast of France. Ships can freely transit that strait and no control, save control for the safety of navigation is exerted by either the UK or France because it's an international strait as defined within the United Nations Convention on the Law of the Sea. This is an interesting point, these international straits. It was mentioned by the IMO Secretary General, but it's really quite core to so many different international straits around the world. If this particular part of UNCLOS wasn't there, then any narrowing in a waterway would be subject to the control of an accompanying state for reasons other than the safety of navigation. Now the rights of a vessel navigating through there are that states cannot just suspend transit through the passage. Uh even during times of war they can't suspend it, and Iran hasn't suspended it. What Iran has stated is that they would board and challenge ships that are going through their territorial seas and have mined the southern part. So they're not saying you can't transit the strait, they're saying if you transit the strait, we're going to challenge you. So that hasn't really been suspended. Um the duties of a vessel navigating through the strait are to continue conditiously and expeditiously through the strait without lingering and anchoring or loitering within the strait. Now at the end of the day, um no ship would want to loiter in the Straits of Hormuz anyway. As the ship passes through, it should refrain from any threat of use or force against any of the bordering states. These are tankers that we're talking about going through, uh not warships, so uh that's important. And they should refrain from research or survey activities without prior authorization. So as they transit the Strait of Hormuz, they can't report back on what they see on the Iranian front, and your average cargo vessel doesn't really want to want to do that. Coastal states do have some powers in these straits. Um, safety and traffic regulation they have, but they can designate traffic separation schemes and reporting points, but only for the safety of navigation, not for the general control of shipping through the straits. Um they can enforce regulations on pollution control within a strait, quite obviously, and they can enforce customs and fishing regulations uh through the uh through the straits. Now, where an international strait connects the the high seas to the territorial sea of a foreign state, and a territorial sea is that sea that is within twelve miles of the coastal state, which indeed, of course, the um uh the Straits of Hormos does, then it may fall under the more restrictive innocent passage regime, which is also defined in the United Nations Convention of the Law and of the Sea. Um there's not too much difference between the right of navigation through a strait and that of innocent passage, other than a uh uh a little thing which is submarines, if they're going through some of these territorial waters, must of course um do it on the surface and must fly the flag. The right of innocent passage only applies if you are registered to a flag state and flying flying the flag of that state. Now, some other states around the world are governed by long-standing international conventions that that supersede Untlos, and one of the most famous examples of this is of course the the Turkish Straits, the Bosphorus and the Dardanelles, which connect the Black Sea to the Mediterranean. Um here the navigation is governed strictly by a convention from 1936 which places specific limits on the tonnage and types of warship uh that can pass through, but this is an exception to the uh to the rule. So there's a little bit there about uh the uh the reality of a strait as mentioned by uh the uh the Secretary General. Um the IMO proposes uh a more cooperative global model rather than tolls for uh people using the straits. Uh heavy newsers would uh would need to assist with payments to aids of navigation and things like that, as they do in the territory waters of many other uh states as well. A ship entering the United Kingdom waters, for instance, would need to pay light dues, which uh are normally collected by the uh by the port. Um at the end of the day, uh despite the the geopolitical tension at the moment, the Secretary General said that uh Iran and Oman have successfully co-managed the strait for decades. And uh he he rejects the idea that Iran is demanding absolute control, and he believes that because the U the IMO has been in continuous talks with Iran over the Straits of Hormuz, and I witnessed some of those discussions personally when I was at the IMO two weeks ago, that he can b he believes that they can return to a a stable cooperative status quo that existed prior to the war starting, and I think that was a really good point that uh Dominguez made, and that is that we were at a really good status quo before the war, and he's keen to get back there. Why is he keen to get back there? He's keen to get back there because he wants to see shipping safely transit the straits. He doesn't want commercial or geopolitical economic pressure to push ships through the straits before the straits are ready to accept them. For those reasons. He doesn't want unnecessary tolls being levied, he doesn't want ships colliding, he doesn't want um uh Iran trying to control the straits outside of the United Nations Convention on the Law of the Sea. He wants that status quo to come back. But let's talk again about these seafarers. Um it's estimated that there are around twenty thousand seafarers in trapped on the wrong side of the Strait of Hormuz uh at the moment. This is on board not just the 500 ships that are sat there, but on board smaller vessels that may not make international voyages, but smaller vessels which may transit the strait to and from ports either side, not to run huge amounts of uh of cargo around, but literally just to transit the straits for operational uh reasons. I heard somebody say the other day that seafarers' pay had gone up because they were stuck in the Straits of Hormuz. So I tried to look into this and I tried to get a little bit more detail on whether or not seafarers were paid more to be stuck on a ship inside the uh the Gulfs area. Now, as I'm sure a lot of us are aware, that uh seafarers move 90% of global trade. We know that 90% of everything is moved by ship, and we have ended up with a globalized uh labour market uh within seafaring, meaning that shipping companies can bypass higher wage demands by hiring from developing nations where the cost of living is lower. So this globalized labour market means that there is very, very little scope for seafarers to barter. The Maritime Labour Convention recognises the importance of collective bargaining, but collective bargaining is only effective when a ship owner has agreed to employ a group of seafarers who form a body to define their own contractual obligations. Nothing's there to stop the ship owner really going and looking at another country that perhaps has less tolerance of unions and collective bargaining and bringing seafarers in that way. So this drives down seafarers pay. Flags of convenience have always driven down seafarers' pay because they sometimes bypass a lot of the uh of the labour laws and the minimum wage requirements in flags of convenience are much lower than those of developed countries. I did a podcast uh a few weeks ago which talked about a shortage of seafarers, and that shortage of seafarers is real, but perhaps only real when we talk about specialised senior officers. So there is a real shortage of um COCs and senior officers with experience who are able to command such ships. But at the moment there seems to be a huge surplus in junior ranks, which kills any incentive to raise base pay. And as said before, union weaknesses and exploitation unfortunately are still out there in shipping, hidden recruitment fees being one of the most sickening things that bypasses the Maritime Labour Convention and is made more possible by flags of convenience who are more likely, some of them more likely to turn a blind eye to that sort of thing. So are seafarers earning more in the Strait of Hormos? Is that a reason for us to think it's okay for them to be trapped on the wrong side of the strait? Now, the answer to that is possibly no, as most of the vessels that are trapped on the other side are registered under flags, which although they recognise the Maritime Labour Convention's uh allowance of bargaining rights of seafarer and in particular collective bargaining, do not allow their vessels to become unionized to the point where seafarers that are operating in a warlike operations area are able to demand higher pay. Some unions are able to obviously uh negotiate higher pay for seafarers that are in these warlike operations areas. Now, a warlike operations area is designated internationally, taking into account the status of the security there, the safety of ships. And when this status has been achieved, um one of the benefits to a seafarer is that they have the right to refuse to enter this zone and that the The ship owner must repatriate them. Trouble is a lot of the ships have been moved so far away from the Strait of Hormos that they are no longer considered to be in that war zone, and therefore the seafarer has lost that obligation. If the ship transits the Strait of Hormos and the seafarer does not want to go through the Strait of Hormos, if when it opens it is still designated as a war zone, then they have the right to request repatriation from the ship. But until that happens, so until their ship moves towards that war zone, or until the ship actually transits the war zone, in other words, if the treaty that Trump's mentioned comes into force, then that war zone designation may be suspended, and therefore the seafarer would no longer have that that right to um uh that right to ask to be repatriated. So seafarers uh may be paid a little bit more than their basic pay for being on the wrong side of the uh of the Straits of Hormuz. Um the IMO has asked states to assist ship owners with uh the exchange of crews in order to ensure that seafarers are able to go on leave when their contracts are up. But something that I didn't think about is that um the IMO have also encouraged states to allow stores to be taken to the ship. Now we're kind of acutely aware that ships require water and food in order to um in order for the seafarers to uh remain healthy on board the ship. So that's obviously something that the IMO encourages states to allow. But the IMO has also encouraged states to allow fuel to be delivered to these ships. Now the main reason for this is that some ships that have been at anchor there for months now are running out of fuel. This isn't because they necessarily want to get underway tomorrow and transit the Strait of Hormuz, it's because that fuel also runs the generators. The generators run the air conditioning, the air conditioning keeps the ships cool. That area of the world frequently sees temperatures of forty degrees Celsius. So if you are stuck as a seafarer on board a ship in those kind of conditions, and you run out of fuel to the extent where you're unable to run your generators and unable to run your air conditioning, that makes it incredibly difficult for you to um to live in any kind of standard on board the ship when the um uh when the fuel runs out. Um at the end of the day, fatigue is setting in a lot of these seafarers because they haven't been able to be repatriated, they've been on the ship for a long time, and although the ship may not have been operationally active from a cargo point of view, which sometimes reduces the uh the workload on seafarers, there's still plenty for the guys to do on board the ship to simply maintain the ship and have her ready for transit as and when the um the time should come. At the end of the day, getting the uh getting the ships uh moving physically um will take weeks because of the high risk of of transiting the Straits of Hormuz. So any fix that states are able to provide to these ships needs to be a long term fix, not a short term fix, as there's lots to be done before the ships can safely move through the uh through the strait. The framework peace agreement uh that has been announced by Trump as a 14-point uh US Iran peace agreement, uh which I said before was uh was mediated uh by Pakistan. Um it includes the complete cessation of hostilities on all fronts, uh the lifting of the naval blockade on Iranian ports, uh Iran is tasked in turn with reopening the Straits of Hormuz within 30 days, under its own arrangements, although everybody through AntLos and the US in particular rejec any uh any toll system that uh may be in place. And of course the big one is that after the the the uh the framework is in place, there's a 60-day window for Iran to uh negotiate its nuclear program uh in exchange for sanctions of relief and unfreezing of some of its uh assets around the world. So we're not going to see an immediate evacuation of the Gulf, we're probably not going to see an immediate opening of the Straits of Hormuz yet, but this peace deal has uh put some light at the uh at the end of the window. On the ground, uh the IMO is faced with a logistical nightmare, and although the Secretary General this morning in his interview touched on uh a few points in reaction to the questions asked by the interviewer, you know there are several things which the IMO is doing at ground level to try and keep ships and their crew safe. Um, the safe evacuation framework is something that the IMO has been working on for some time, and it's not just about uh putting a passage plan into place through the Straits of Hamoz, it's about setting up a strategy using the existing traffic separation scheme running through the Oman Territorial Sea in order to move these ships safely and prevent collisions. Naval escorts alone are not a sustainable solution for the zero fire precondition of this agreement, and before the evacuation begins the IMO has asked for verified ironclad agreements from all warring parties to explicitly refrain from targeting maritime assets during the Exodus. Something that the IMO will obviously send back through, both the US and the Iranian delegates at the IMO, but nonetheless they are specifically asking for that. We've talked about it before, but the IMO want humanitarian supply corridors to be clearly established. Clearing the mines and moving the ships will take weeks. The immediate threat, as we've said, is that seafarers once again run out of food, water, and end up with heat stroke because of a lack of fuel. So the IMO, as I said, is aggressively lobbying coastal states to establish ship-to-ship supply lines in order to have these uh these supplies given to ships from the coastal states within the Gulf itself. The IMO is also serving as the technical backbone of the of the newly established UN task force on the Strait of Hormuz. Um through this hub that they're centralising chaos, verifying and tracking incident data, uh coordinating emergency medical evacuations and running dedicated helplines for terrified families back home. This is of course is in response to the fact that 46 seafarers have already lost their lives in attacks on ships in and around that area. The IMO is also pushing for immediate crew rotations. So the ultimate goal is getting the physical ships out of the Gulf. The IMO is really simultaneously trying to negotiate localized immediate crew rotations. Um far uh the IMO website says that they've managed to assist roughly 450 seafarers in evacuating via small boat transfers, prioritizing those that are medically and physiologically exhausted by their uh their stay at anchor on the wrong side of a Strait of Hormuz. Finally, um one of the hurdles that we talked about in my previous podcast is also a hurdle now to moving the ships and getting our seafarers out of the Strait of Hormuz and back to some sense of normality, and that's the astronomical premiums associated with shipping insurance. Now, the London insurance market prior to the war had uh additional war risk premiums around the Gulf area because it's a very volatile area. Uh the normal levels were about 0.15% of the value of the ship and its cargo. That has risen during the war to between four and ten percent of the value. So the real cost of this could mean that uh a large modern um VLCC transit would cost the ship owner around 14 million dollars in insurance alone, making it financially unviable for that ship owner to move the ship at the moment. So it's not as if the Straits of Homas are simply closed by Iran's threat of mining, they are closed because ship owners can't afford the uh war risk premium to move their ship through that area at the moment. It was quite amusing. I was listening to a uh a radio interview on it uh a few days ago, and the guy that they were interviewing said that $14 million was roughly equivalent to having to send the ships around the Cape, so maybe the ship should be sent around the Cape. I think he was confusing the Straits of Hormuz with the Straits of Babel Mandab and the problems at the bottom of the Red Sea because there is no other way out of the Gulf. So if you hear a radio interview that starts comparing the um insurance premiums in the Straits of Hormuz to transits around the the Cape, then they've probably either read it online or uh or got their um geography completely wrong. There is only one exit from the the Gulfs area and that is through the Strait of Hormuz. One exit for ships that is. Okay. Now what I find um staggering is that these insurance premiums will stay high for so long. Now, the insurance premiums are not just going to come down based along uh based on some sort of political memorandum of understanding generated between the US and Iran. It's going to take weeks and weeks of sustained incident-free transits before the underwriting trade will return to normal through that Gulf region uh again. Some commentators online are calling it the rocket and feather reality. Uh this is that when the war starts, your um insurance premiums will rocket up, they'll shoot up very, very quickly, but it takes a lot of reassurance for the insurance market to return to normal. So whilst the price of insurance shoots up like a rocket, it descends slowly like a feather. Uh, and so we do have um the uh you know a long time to wait. The drop in oil prices, however, is instant, and this is I think is one of the saddest things when it comes to bringing seafarers out from uh the uh the Gulf area, in that because of the announcement of this deal, we are now seeing um uh Brent crude prices drop from their uh from their high. So their high was uh around uh around mid-April when it went up to around $120 a barrel. Um now I'm looking at a live feed at the moment of um uh of Brent crude, and it's currently running at $77.5 uh dollars a barrel. Now, pre-war, uh if we look back in December of last year, we were right down at $60 a barrel, or $58.68 was the lowest it went. Um so you know we've almost doubled in price, um, peaking there on the 29th of April at $118. We've now come down to uh $77.55, which is the current price today, Tuesday the 16th of June, should say that on the uh on the podcast. So the announcement that we have this agreement in place has caused the oil prices to drop very, very quickly. Now that's great for those of us that use oil, and uh you know the prices at the pump are hopefully going to follow suit, but it doesn't help your seafarers because the ships cannot physically move themselves because the war risk premiums are not falling as quickly as the oil prices. At the end of the day as well, um the um the sheer evacuation of ships from the Gulf may temporarily flood the oil market, driving oil prices down even quicker, but without those insurance prices coming down, and therefore, whilst those of us who uh live uh live ashore and have to fill up our cars every now and again will benefit from us, those seafarers that are trapped on the wrong side of the straits do not benefit from a drop in oil prices. They need the straits open, they need insurance values to come down, they need international cooperation to allow the Straits of Hormuz to function as a navigational strait, for ships to have the right of innocent passage, for ships to be able to make that passage without fearing any kind of retaliation from either Iran or ultimately from any of the other states involved in the conflict as they target the other state ships. I was really impressed with the way the IMO Secretary General came across this morning. Just to reiterate, he was pushed by the interviewer to start to talk about geopolitical stuff, to start to talk about oil prices and about the effects to the market of those ships coming through. But he said the word seafarers within the first minute of his interview. He said the word safety numerous times, perhaps ten, even twelve times in his interview seafarers and safety. That's what he was concerned about. Not global oil prices, not global markets, not insurance markets, not the profits of ship owners. He was more aligned with the seafarers and their safety, as we all should be. It's too easy for us all when we see the news tell us that peace agreements have been made in areas that have affected global trade for us to get excited about the immediate effect on our wallets and how we are going to benefit from there being no war. Remember, seafarers are there, they serve the world, they move ninety per cent of the world's goods around, and they deserve to be foremost in our thoughts whenever a media explosion like this happens, where we are flooded with information about a peace deal being uh being met, we are immediately concerned about our seafarers and the fact that hopefully after months of being stuck on board with limited supplies of food and water, with ships that may have overheated, with the inability to go home at the end of their contracts, that they finally return to some sense of normality, either by getting repatriated at the most earliest convenience, or returning to normal on board life with good food, plenty of water and fuel enough to power the air conditioning to make living on board the standard that it should be as demanded by the Maritime Labour Convention. The next time you hear on the radio, a peace deal in the Strait of Hormuz has been reached or signed. Think of the seafarers, not the price at the pumps. Thank you very much everyone for listening to this podcast. I know we've jumped around a bit in it, talking about lots of different things, but it was prompted by that interview that I listened to this morning with the uh Secretary General of the IMO and how it made me smile as he mentioned seafarers primarily over global markets. Thanks a lot, guys, and uh I look forward to welcoming you back to the Maritime Education Podcast. If you enjoy listening to me, then please subscribe to the podcast, and I look forward to welcoming you back soon. Thank you very much.