TOKYO - A covert network of shuttle tankers is carrying crude through the increasingly dangerous Strait of Hormuz as renewed fighting between the United States and Iran disrupts shipping and raises concerns over how Japan will secure the oil it needs.
The U.S. military said it completed a ninth consecutive day of attacks against Iran, while the Trump administration has reportedly deployed additional F-16 fighters, F-35 stealth aircraft and aerial refueling tankers to the Middle East, fueling expectations that the campaign could intensify.
Iran’s nuclear authority said a construction site for a nuclear power plant in the country’s southwest was struck by U.S. forces on July 19. The International Atomic Energy Agency said the facility remained at an early stage of construction and that the likelihood of radiological consequences was low.
Two U.S. service members were killed and another was reported missing following an Iranian attack on July 17, according to U.S. Central Command. A soldier was also killed while handling unexploded ordnance in northern Iraq on July 18, bringing the number of U.S. military deaths from combat and accidents since the conflict began to 17.
The latest escalation came less than a month after the United States and Iran signed a memorandum on June 17 that temporarily halted the fighting. U.S. attacks resumed on July 7, followed by Iranian retaliation against American military facilities across the region.
The dispute centers partly on conflicting interpretations of the memorandum’s provisions concerning the Strait of Hormuz. One clause called on Iran to make its best efforts to ensure safe passage for commercial vessels without charge for 60 days.
Iran viewed the provision as recognition of its authority over the strait, while the United States believed Tehran had also given verbal assurances that it would neither impose transit fees after the 60-day period nor strengthen its control over shipping.
The disagreement deepened after the United States and Oman began helping vessels pass through the waterway. Iran accused Washington of escorting suspicious ships, including vessels sailing with their Automatic Identification System signals switched off.
Iranian Supreme Leader Mojtaba Khamenei said on July 18 that the renewed attacks had demonstrated that the U.S. president’s signature was worthless and could not be trusted.
An Iran-aligned militia in Iraq also announced a $10 million reward, equivalent to about 1.6 billion yen, for anyone who killed President Donald Trump. U.S. intelligence agencies and the Secret Service have previously investigated possible Iranian plots against Trump, although Iranian involvement in earlier attempts on his life has not been established.
Iran has also warned that attacks on its electricity and other civilian infrastructure could prompt retaliation against similar facilities elsewhere in the region. Tehran has instructed the Iran-backed Houthi movement in Yemen to prepare for a possible blockade near the Bab el-Mandeb Strait, where missiles and drones have reportedly been deployed.
The Houthis have not always acted directly on Iranian orders, but they have shown that they will retaliate when their own facilities are attacked. Any disruption around Bab el-Mandeb would place further pressure on international shipping already struggling with restrictions at Hormuz.
Shipping traffic through the Strait of Hormuz remains far below normal levels. Vessel movements increased slightly after the June memorandum but fell sharply again following the resumption of U.S. attacks on July 7.
Tracking data showed only a handful of tankers moving through the strait on the morning of July 20. Some Iran-related vessels under international sanctions had entered the waterway before sharply changing course around July 15, when what shipping analysts described as a reverse blockade began to take shape.
Activity has instead intensified around Fujairah, a major energy hub on the United Arab Emirates’ east coast outside the Strait of Hormuz. Crude transported by pipeline from Abu Dhabi can be loaded at Fujairah without passing through the strait.
Satellite images have shown small tankers transferring crude to larger vessels offshore. Some of the smaller vessels are believed to be shuttle tankers that enter the Persian Gulf, collect crude from the UAE or other producers and carry it through Hormuz for transfer to ships waiting in safer waters.
Other shuttle tankers may collect crude inside the gulf and transport it to Fujairah, where it is loaded onto vessels bound for overseas markets. Many of the tankers switch off their identification signals, making their movements difficult to detect through public ship-tracking services.
Shuttle operations had been taking place since a provisional ceasefire agreement in April, but the risks increased sharply after Iran attacked two UAE crude tankers conducting shuttle operations off the coast of Iran on July 14. Both ships suffered major damage.
Despite the danger, tanker movements around Fujairah have continued. Maritime specialists said the port itself had not ceased functioning and that ships were still moving actively between the harbor and offshore transfer points.
The shuttle system has become particularly important for Japan, which produces little crude oil domestically and must rely on imports. Japanese tankers are generally avoiding Fujairah because waters around the port have also been designated a high-risk area.
Instead, some vessels are waiting near the Strait of Malacca, where crude transported from Fujairah by foreign-owned tankers is transferred again before continuing to Japan. The arrangement creates a two- or three-stage supply chain stretching from the Persian Gulf to Fujairah, then to Malacca and finally to Japanese ports.
Shipping industry specialists said Greek and South Korean shipowners were among those reported to be operating shuttle tankers. Some owners are offering crews substantial compensation and special bonuses for completing voyages through the danger zone.
Older tankers, including vessels approaching the end of their operating lives, are believed to be widely used because owners are reluctant to expose newer ships to missile or drone attacks. The available fleet is therefore limited, and a small number of successful Iranian attacks could discourage even highly paid crews from continuing the service.
The United States is believed to be helping protect some shuttle routes in cooperation with Oman and the International Maritime Organization. U.S. attacks on Iranian radar sites and surveillance facilities along the southern coast may also have reduced Tehran’s ability to detect and stop covert tanker movements.
Iran would probably attempt to intercept shuttle tankers if it identified them, analysts said. Tehran would not need to destroy the entire network to disrupt operations, because attacks on one or two vessels could create a powerful deterrent effect.
The additional transfers have sharply increased shipping costs. Freight rates from Saudi Arabia’s Ras Tanura port to the Far East have risen to more than five times their January level.
Even so, Middle Eastern crude transported through the shuttle system remains slightly cheaper than crude shipped from the United States. A round trip between the Persian Gulf and East Asia generally takes 40 to 50 days, while a voyage from the United States can take about 60 days each way when large tankers must travel around the Cape of Good Hope.
The volume moving through the secretive shuttle network is difficult to estimate because many ships sail without transmitting identification signals. Industry specialists believe substantial quantities moved during the earlier fighting, although flows appear to have weakened over the past several days as attacks intensified.
Japan imported more than 90% of its crude from the Middle East in fiscal 2025, leaving it particularly exposed to disruption at Hormuz. Since the strait became effectively impassable to most commercial tankers, Japan has increased purchases from routes outside Hormuz and sharply expanded imports from the United States.
For July, oil arriving from the United States and Middle Eastern ports outside Hormuz is expected to account for a large share of Japan’s supply, with American crude alone approaching half of the total. U.S. shipments to Japan are projected to be more than 10 times the level recorded in July last year.
That alternative is also becoming less secure. The United States has been releasing about 1 million barrels a day from its Strategic Petroleum Reserve to stabilize prices and supply oil to Japan and Europe following the disruption at Hormuz.
The reserve held about 315 million barrels out of a maximum capacity of roughly 700 million barrels, less than half full and at its lowest level in 43 years as of July 15. At the current rate of release, it could fall to 250 million barrels, the minimum level that can be reached without a presidential emergency declaration, in about 60 days.
A separate authorization approved in March for reserve releases could be exhausted within about a month if withdrawals continue at their previous pace. Additional releases would require another political decision and could themselves unsettle markets.
Pressure could then grow within the United States to restrict or ban crude exports to protect domestic consumers. Bob McNally, a former presidential energy adviser, said that if traders concluded a U.S. export ban was likely, oil prices outside the country could immediately surge well beyond $100 a barrel from around $83.
An export restriction might temporarily lower American prices but would reduce global supply and eventually push prices higher inside the United States as well. Japan would be unlikely to receive an exemption under an America First policy, according to specialists in U.S. foreign and security affairs.
Global supply is also being squeezed by damage to Russia’s refining industry. Ukrainian attacks have reportedly eliminated 58% of Russia’s oil-processing capacity, forcing Moscow, normally the world’s second-largest diesel exporter after the United States, to impose temporary export restrictions and begin importing gasoline in July.
China reduced crude imports by about 40% after oil prices surged following the attacks on Iran, but it could increase purchases again as prices retreat. China has also expanded liquefied natural gas imports as industrial users switch between LNG and petroleum products depending on relative prices.
The conflict therefore threatens not only crude oil but also global LNG supplies. Spot purchasing for the Northern Hemisphere winter is expected to begin between late August and early September. If Qatari LNG remains unavailable, Europe could enter the winter with insufficient gas in storage.
A prolonged disruption could push up both oil and LNG prices, increasing electricity and gas costs worldwide. Europe would be particularly vulnerable and could face conditions similar to the severe energy crisis of 2022.
Japan has begun examining supplies from Latin America, Oceania and Africa, but replacing Middle Eastern and U.S. crude would be difficult because Japanese refineries are configured to process particular grades of oil. Japan’s dependence on Middle Eastern crude reflects not only geography and price but also the technical requirements of its refining system.
Iran has warned that further U.S. attacks could bring retaliation against Abu Dhabi, Dubai, Fujairah, airports and other logistics hubs across the region. Such strikes could severely disrupt the movement of oil, goods and people throughout the Middle East.
Trump has said the memorandum with Iran is over and that he wants no further involvement with Tehran, although he has also allowed U.S. negotiators to continue discussions. Iran’s Foreign Ministry said diplomacy and war should not be viewed as mutually exclusive, describing both as means of pursuing the country’s national interests.
With neither side accepting the other’s interpretation of the June agreement, renewed talks face a basic problem of trust. Iran has questioned who within the U.S. government could guarantee that any future agreement would be honored, while Washington continues to rely on military pressure in an effort to force Tehran back to negotiations.
For Japan, every additional day of fighting increases dependence on aging tankers, hidden transfers and increasingly expensive alternative supplies. The shuttle network may be keeping some crude moving, but its survival depends on shipowners and crews continuing to risk their lives in one of the world’s most dangerous waterways.
Source: TBS
