Iranian parliament committee works through Hormuz shipping bill clause by clause

Iran's parliamentary national security and foreign policy committee is reviewing and approving a bill on the management and strategic development of the Strait of Hormuz clause by clause, before it goes to a vote of the full chamber, committee member Hassan Ghashghavi told RIA Novosti on September 17.

The legislation would put into statute a closure that has held for most of the past seven months. The bill would bar vessels from the US, Israel and other states Iran regards as hostile, prohibit the carriage of any cargo affiliated with Israel, whether military or civilian, and provide for fines of up to 20% of the value of goods carried, Fars News Agency reported previously.

Ghashghavi said work is proceeding on two levels, with the committee handling the bill and a separate track covering negotiations between Iran and Oman on an arrangement for the strait. Muscat and Tehran have agreed a plan to reopen the waterway, according to reports this week, and China has pressed Iran directly to allow traffic to resume, urging restraint on both Tehran and Washington.

Transits through the strait have remained in single digits in recent days as Tehran and Washington remain at an impasse. IMF PortWatch recorded eight crossings on September 13, down from a pre-crisis baseline of about 85 a day.

Iranian forces declared the strait closed days after the US and Israeli strikes that began on February 28, and cross-strait traffic largely halted, leaving hundreds of vessels and thousands of crew inside the Gulf.

Maersk, MSC, CMA CGM and Hapag-Lloyd suspended transits, and more than 150 tankers anchored outside rather than risk attack. War risk cover rose from about 0.125% of hull value per transit before the crisis to between 2.5% and 5% at the March peak, equivalent to roughly $5mn for a very large crude carrier.

A ceasefire in early April and a memorandum of understanding in mid-June allowed partial reopening from around June 17, though volumes stayed well below normal. That arrangement broke down in early July after attacks on commercial vessels.

Around 13mn barrels a day of crude normally move through the strait, close to a fifth of global consumption, alongside more than 80mn tonnes a year of liquefied natural gas.

The International Energy Agency has called the disruption the largest in oil market history, with cumulative supply losses above 360mn barrels in March. Brent rose about 65% by the end of March to record its largest monthly increase, and the World Bank expects it to average $86 a barrel this year before falling to $70 in 2027, assuming exports stabilise near pre-war levels.

Gulf producers have no alternative route for most volumes, and the closure has hit the region's smaller economies hardest, with Bahrain most exposed.

The US and Israel began striking targets in Iran on February 28, with Iran responding with strikes of its own. The conflict remains unresolved.