🔮 Hormuz Will Stay Open: Tanker Expert
Shipping expert who tracks Persian Gulf traffic says closure odds are overpriced
Yiannis Parganas is Head of Research at Intermodal Brokers, an Athens-based shipbroker. As Iran threatens to close the critical chokepoint, he explains why Polymarket traders may be overestimating the risks of a closure, and why China's record oil stockpiles are an important signal for global oil markets.
This interview has been edited for length. All answers are his own.
Iran's parliament passed a bill to close the Strait of Hormuz over the weekend, but Polymarket odds for this have fallen. What's driving that decline?
People are reading more and understanding the bigger picture. Around 25% of Iranian GDP comes from oil and gas exports. If they close the strait, competing oil suppliers like Saudi Arabia, UAE, Brazil and the US will benefit as they will be able to increase exports. OPEC has announced they'll increase supply if needed, which would further dampen the effect on oil prices.
Iran closing the strait would only harm themselves and allies like Qatar and China. Yes, it could shock consumers and drive oil to $100-110, but we've seen that before with the Russia-Ukraine war. The world can handle this tension.
For Iran, closing the strait isn't a negotiation card anymore, it's an invitation for Israel and the US to keep striking them. They could have played this card 30 years ago, but not today. Now, we have renewable energy, LNG, multiple sources from West Africa, Canada, USA, Brazil. Oil is important but won't shock the world.
Another huge factor is that China has around 1.03 billion barrels in storage right now, which is a record. They've imported massive amounts of oil and used VLCCs [Very Large Crude Carriers] to store oil outside the Persian Gulf. We're seeing a pool of VLCCs linked to Iranian trade, full of oil. You can track this through the draft of the vessels. This suggests preparation for potential disruptions, but also that China has already positioned itself to weather a closure.
If Iran were to disrupt the strait, how would they do it?
If the strait does get blocked, it would likely be a short term symbolic thing. Just for a few days, or you might see more vessels turning around. If Iran did try to close it, it would likely be through missiles and speedboats, but not with mining. They won't put mines in the water because that would have long-term effects. We've seen attacks on vessels before, but not long-term.
If they lay mines, it's like saying they'll harm their own economy to the point of ending Iran's economic and military strength. That would mean real war in the region, and they'd lose support from countries like Qatar and China.
What about selective targeting of ships, like the Houthis do in the Red Sea?
Yes, they could selectively target certain flags, but there are no US ships or Israeli ships going through anyway. If they banned Greek ships, yes, huge effect. But if it's only US, Israeli, French or German vessels, the effect would be minimal.
If they tried to ban Gulf state vessels, Saudi, UAE, Qatar, that's an act of war against those countries. These countries have diplomatic ties with the US, but their people support the Palestinians. If Iran forces them to feel economic pain, it destroys Iran's regional support base.
Current Polymarket odds show 27% for Iran to close the Strait of Hormuz by July, 47% by year-end. How do you see it?
The 47% is high. If we don't see closure in the next 5-7 days, I don't think it happens next month. If something happens, it's very near-term. I'd put it around 30-35% by end of June.
For longer term like October or November, I don't see why there's a high probability. Maybe 20-25% for the year [if no closure in the short term].
There's a market on Iran striking Gulf oil facilities at 27%, up from under 10% recently. How do you see it?
I'd put zero chance, maybe 5-10% maximum. Why would they strike Saudi or Qatari facilities? To pressure who? Saudi Arabia isn't attacking Iran and won't support them either, they're in a neutral position.
Iran has the capability to hit these facilities with missiles. They can hit Tel Aviv, so technically they could hit Gulf facilities. But it's not about capability, it's about what happens after. There's no strategic point to disrupting other Gulf countries' oil exports.
What about alternatives to Hormuz? Can Gulf states export oil other ways?
Saudi Arabia has the east-west pipeline, so they can export from the Red Sea. It's really only Qatar that relies almost entirely on the strait for huge volumes. And Qatar is trying to support Iran diplomatically and push for negotiation instead of war.
Before June 13, oil was $68-70. For OPEC countries, keeping oil above $70 through tensions is actually beneficial. So there's some economic incentive to maintain manageable tension levels.
What are the shipowners you speak with telling you? How are they reacting to the situation?
Shipowners are willing to transit but demanding huge premiums, 5-10% of vessel value. They're sending older vessels, not expensive new ones, just like we saw with Russian cargo routes.
They're minimizing time spent in the Persian Gulf. If we see an actual tanker attack, premiums will skyrocket further and demand for older ships will increase since insurance is percentage-based.
The key thing is that shipowners are still willing to go, which tells you they don't see imminent closure risk.
Iran could retaliate against US or Israeli strikes. What are the most likely targets?
This depends on Iran's actual situation, they're hiding what's happening internally. If their nuclear facilities are totally destroyed, they might do something symbolic like attacking a US base, but under agreement with the US to save face domestically.
This happened before with Israel: selective attacks with no civilian casualties, essentially a choreographed response. Iran doesn't want full blown war with the strongest military in the world.
Beyond the Gulf, how do you see the situation affecting other conflicts?
The Hamas-Israel ceasefire market 2025 should be higher. It's been around 70-80%, but I think it could be even higher now. With Iran defending its own borders instead of funding proxies, Hamas might be more willing to negotiate without Iranian backing.
Also the Russia-Ukraine angle. Putin isn't supporting Iran at all in this conflict. This gives Russia more leverage with the US, Russia can extract concessions on Ukraine in exchange for continued non-support of Iran. As a result we’ve seen the Russia-Ukraine ceasefire odds drop from 40% to 22%.
Where do you see oil prices going?
Before June 13, oil was $68-70, which is very low for OPEC. Through manageable tensions, they can keep oil above $70, which is actually a win-win economically. Current $75-76 isn't problematic at all. OPEC might prefer this controlled tension to full peace.
Are there any markets on Polymarket you'd like to see added?
Attacks on specific vessel types would be interesting. A selective attack on a Greek tanker or LNG vessel would add huge premiums. That's where Iran could create real economic pressure without fully closing the Strait of Hormuz.
Bottom line for traders?
The shipping data shows business as usual, but with elevated premiums. If Iran were seriously planning closure, we'd see different vessel movement patterns. The strait closure markets are overpriced Iran can't afford to shoot themselves in the foot economically.
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