Strait of Hormuz, breaking news! South Korea joins G7 joint statement, Japanese vessels may be able to pass through

Latest Situation in the Strait of Hormuz

According to Xinhua News Agency, citing Lloyd’s List on the 20th, a Greek bulk carrier with its Automatic Identification System (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. AIS shows it is carrying “food cargo destined for Iran.”

Since the US and Israel launched 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 US crude and Brent crude have increased by over 40% in total. Currently, ICE Brent crude has surpassed $100 per barrel.

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

On the evening of March 20, South Korea’s Ministry of Foreign Affairs announced that the government 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 Traceable Bulk Carrier Enters the Persian Gulf

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, the vessel bypassed Larak Island, following a route similar to the “safe corridor” designated by the Iranian Islamic Revolutionary Guard Corps.

It also reports that at least nine other 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, it was reported that on March 5, a Panama-flagged ship was heading west through the Strait of Hormuz into the Persian Gulf, but it was operating in stealth mode with AIS turned off.

When Iran’s Islamic Republic Broadcasting retweeted this report, it said that ships should keep AIS responders on if they agree to pay a $2 million transit fee, stating that “this makes passing through the Strait of Hormuz safer.”

South Korea Joins the Seven-Nation Joint Statement; Iran Willing to Allow Ships Related to Japan to Pass

On the evening of March 20, South Korea’s Ministry of Foreign Affairs announced that the government 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 security of international maritime routes, international developments, and the direct impact of disrupted navigation in the Strait of Hormuz on Korea’s energy supply and economy.

The joint statement by the seven countries on March 19 condemned Iran’s de facto blockade of the Strait of Hormuz.

Additionally, 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 de-escalation.

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%, whether ships can pass through the Strait of Hormuz is of great importance.

Araghchi stated 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 negotiations with relevant nations, with safety guarantees provided.

The 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 critical global energy transit route, has been severely disrupted, causing significant impacts on global trade flows and economic development, leading to soaring shipping costs and supply chain adjustments.

Influenced by escalating tensions in the Middle East, international oil prices have continued to rise, with US crude and Brent crude increasing by over 40% in total.

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 March 20, Federal Reserve Board member Waller said that if the US, Israel, and Iran conflict persists for several months, the US economy could face a more pronounced slowdown than expected. As oil prices rise, US consumers will cut back on other spending, weakening economic prospects. Waller noted that this change “may not directly cause a recession but will lead to a more noticeable economic slowdown than expected.”

A survey of economists published by The Wall Street Journal on March 19 showed that the probability of a US recession within a year is 32%, higher than the 27% they expected in January. If the average crude price reaches $138 per barrel, the likelihood of a recession within a year could rise to 50%.

On March 20, Slovak Prime Minister Fico warned that 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 an extra €6 billion due to rising fuel prices. Coupled with Europe’s current economic situation and substantial support for Ukraine, this creates a “volatile mix.” Fico warned that future developments could be very bad and even risk triggering an oil crisis. He called on the EU to push for the quick reopening of the “Friendship” oil pipeline.

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

To cope with rising aviation fuel costs, US carriers like United Airlines and New Zealand Airlines have announced reductions in scheduled flights. Reuters reported that since late February, fuel prices have nearly doubled, increasing costs industry-wide. 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 is a key industrial metal and one of the non-oil commodities most affected by Middle Eastern conflicts. 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 that it would phase out three production lines, accounting for 19% of 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 pre-conflict levels, before pulling back slightly. 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 worsens. Experts warn that tightening aluminum supply could impact supply chains in advanced manufacturing sectors, raising costs for automotive, aerospace, and construction industries.

Faced with severe shipping disruptions in the Strait of Hormuz, on March 20, U.S. President Trump posted on “Truth Social” that as the U.S. “approaches” achieving its military objectives against Iran, it will no longer bear responsibility for guarding and patrolling the Strait. This work should be undertaken by the countries using the strait. Analysts believe that while Trump emphasizes that the U.S. is considering gradually ending military actions against Iran, he also attempts to shift the security responsibility of the Strait of Hormuz to other nations.

Compiled from: CCTV News, Xinhua News Agency

Proofread by: Panda