Strait of Hormuz, Breaking News! South Korea Joins Seven-Country Joint Statement, Japanese Vessels May Be Allowed to Pass

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Latest Situation in the Strait of Hormuz

According to Xinhua News Agency, citing Lloyd’s List on the 20th, a Greek bulk carrier with AIS (Automatic Identification System) turned on is passing through the Strait of Hormuz into the Persian Gulf. This is the first vessel to do so in a traceable state since March 2. AIS shows it is carrying “food cargo destined for Iran.”

After the US and Israel military strikes on Iran, shipping through the Strait of Hormuz has been continuously disrupted, disturbing the global energy supply system. Since the conflict erupted, both WTI and Brent crude oil prices have increased by over 40%, and ICE Brent has now surpassed $100 per barrel.

On March 20, local time, U.S. President Trump posted on “Real Social” that as the U.S. “approaches” achieving its set goals regarding military action against Iran, the U.S. will no longer bear the responsibility for guarding and patrolling the Strait of Hormuz. This work should be undertaken by the countries using the strait.

The Korean Ministry of Foreign Affairs stated on the evening of the 20th that South Korea has decided to join the joint statement on the Strait of Hormuz issued by the UK, France, Germany, Italy, Japan, the Netherlands, and Canada. Iranian Foreign Minister Araghchi, in a phone interview on the 20th, said that after negotiations with Japan, Iran is willing to allow ships related to Japan to pass through the Strait of Hormuz.

A bulk carrier enters the Persian Gulf in a traceable state

According to Lloyd’s List on the 20th, a Greek bulk carrier with AIS turned on is passing through the Strait of Hormuz into the Persian Gulf. This is the first vessel to do so in a traceable state since March 2.

The vessel, named “Jacometti,” flies the Liberian flag and is operated by a Greek bulk shipping company. AIS shows it is carrying “food cargo destined for Iran.”

The report states that on March 20, local time, the vessel bypassed Larak Island, following a route similar to the “safe corridor” designated by the Iranian Islamic Revolutionary Guard Corps.

It is also reported that at least nine ships are using the same route, approaching the Iranian coast and bypassing Larak Island, with the IRGC visually confirming ships passing through the strait.

Additionally, on March 5, a ship flying the Panamanian flag was reported to have passed westward through the Strait of Hormuz into the Persian Gulf, but it was operating in stealth mode with AIS turned off.

Iran’s Islamic Republic Broadcasting quoted the above report, stating that ships are advised to keep AIS responders on if they agree to pay a $2 million transit fee, to ensure safer passage through the strait.

South Korea joins the seven-nation joint statement; Iran is willing to allow ships related to Japan to pass through the Strait of Hormuz

The Korean Ministry of Foreign Affairs announced on the evening of the 20th that South Korea has decided to join the joint statement on the Strait of Hormuz issued by the UK, France, Germany, Italy, Japan, the Netherlands, and Canada.

The ministry said this decision was made considering South Korea’s basic stance on the safety of international maritime routes, international developments, and the direct impact of disrupted navigation through the Strait of Hormuz on Korea’s energy supply and economy.

The seven countries issued a joint statement on the 19th condemning Iran’s de facto blockade of the Strait of Hormuz.

Furthermore, according to Japanese sources, Iranian Foreign Minister Araghchi, in a phone interview on the 20th, said that after negotiations with Japan, Iran is willing to allow ships related to Japan to pass through the Strait of Hormuz. He stated that both sides have begun discussions on a temporary解除 of the blockade.

As the conflict continues to escalate, many ships related to Japan are stranded in the Persian Gulf. For Japan, which relies on Middle Eastern oil imports for over 90%, the ability to pass through the Strait of Hormuz is critically important.

Araghchi explained that Iran has not blocked the Strait of Hormuz but has restricted passage for ships of hostile countries attacking Iran. He said that ships from non-hostile countries wishing to pass can do so after consultations with relevant nations, with safety guarantees.

Ongoing blockade of the Strait of Hormuz impacts the global economy

Since the outbreak of the US-Israel-Iran conflict, shipping through the Strait of Hormuz, a vital artery for global energy transportation, has been severely disrupted, causing significant impacts on global trade flows and economic development, leading to soaring shipping costs and supply chain adjustments.

The tense situation in the Middle East has caused international oil prices to surge, with both WTI and Brent crude increasing by over 40%.

UBS’s latest report states that the multiple adverse factors facing the US economy make this round of oil price increases more damaging than previous ones.

On the 20th, Federal Reserve Board member Waller said that if the US conflict with Iran continues for several months, the US economy could face more pronounced slowdown risks than expected. Rising oil prices will lead consumers to cut back on other spending, weakening economic prospects. He noted that this change “may not directly cause a recession but could lead to a more noticeable economic slowdown than anticipated.”

A survey published by The Wall Street Journal on the 19th showed that economists estimate a 32% chance of a recession in the US within a year, up from 27% in January; if the average crude price reaches $138 per barrel, the likelihood of recession could rise to 50%.

On the 20th, Slovak Prime Minister Fico warned that a combination of multiple factors could trigger an oil crisis in Europe. He said that since the US and Israel launched strikes on Iran, the EU has paid over 6 billion euros extra due to rising fuel prices. Coupled with Europe’s current economic situation and substantial support to Ukraine, this creates an “explosive mix.” Fico warned that future developments could be very severe, even risking a full-blown oil crisis. He called on the EU to push for the quick resumption of the “Friendship” oil pipeline.

On the same day, Spanish Prime Minister Sanchez announced a €5 billion plan with 80 measures to counteract the economic impact of rising energy prices.

To cope with rising aviation fuel costs, US-based United Airlines, New Zealand Airlines, and other carriers have announced reductions in scheduled flights. Reuters reported on the 20th that since late February, fuel prices have nearly doubled, increasing industry costs. Route adjustments and airspace restrictions have also disrupted global aviation operations.

In addition to rising oil prices, disruptions in Middle Eastern industry have caused aluminum prices to soar to four-year highs. Aluminum, a key industrial metal and one of the most affected non-oil commodities in the Middle East conflict, has seen prices spike. According to CCTV Finance, Bahrain Aluminum operates the world’s largest single aluminum smelter with an annual capacity of about 1.6 million tons. Due to shipping disruptions through the Strait of Hormuz, the company announced last weekend a phased shutdown of three production lines, accounting for 19% of its total capacity. This news pushed international aluminum prices to a four-year high, with three-month futures on the London Metal Exchange approaching $3,500 per ton on the 16th, up over 11% from before the conflict. Citibank analysts raised their three-month aluminum price forecast from $3,400 to $3,600 per ton, predicting prices could reach $4,000 if supply conditions worsen. Experts warn that tightening aluminum supply could impact supply chains in advanced manufacturing sectors, increasing costs for automotive, aerospace, and construction industries.

Faced with severe shipping disruptions through the Strait of Hormuz, President Trump posted on “Real Social” on March 20 that as the US “approaches” achieving its military objectives against Iran, the US will no longer undertake the responsibility of guarding and patrolling the Strait of Hormuz. This work should be carried out by the countries using the strait. Analysts believe that Trump is emphasizing that the US is considering gradually ending military actions against Iran while trying to shift the security responsibility of the strait to other nations.

Compiled from: CCTV News, Xinhua News Agency

Editor: Wan Jianyi

Proofreader: Pan Da