Citrini Research, a Wall Street firm known for its bearish AI report earlier this year, sent an analyst to the Strait of Hormuz to assess shipping activity amid escalating tensions between Iran and the U.S. The analyst, who remains anonymous, found that vessels are still transiting the strait, with traffic picking up to roughly 15 ships per day—far below normal levels but higher than official data suggests. The firm claims many ships turn off their Automatic Identification System (AIS) transponders, making them invisible on tracking systems.
Key Findings from the Analyst
The analyst, dubbed "Analyst #3," traveled to Oman’s Musandam Peninsula and observed shipping activity firsthand. According to Citrini’s report, vessels are spoofing location data and changing ownership designations to disguise movements through Iran’s tolling system. The firm asserts that the market has underestimated the volume of Iranian-directed shipping traffic.
Market Implications
Oil prices initially spiked on Sunday but moderated by Monday, with Brent crude rising 0.4% to $109 per barrel and WTI crude hovering around $112 per barrel. The latest data from Bloomberg Intelligence shows 21 ships transited the strait over the weekend, though Citrini claims the actual number is higher.
Iran’s Selective Approach
The analyst’s interviews with fishermen, smugglers, and regional officials suggest Iran is selectively allowing ships to pass. Tankers reportedly require approval before transiting waters near Iran, indicating a controlled rather than complete closure of the strait.
Broader Context
The Strait of Hormuz is a critical waterway linking the Persian Gulf to the Arabian Sea, responsible for a significant portion of global oil shipments. Recent tensions have raised concerns about potential disruptions, but Citrini’s findings suggest the situation is more nuanced than a total shutdown. Bahraini-led efforts at the UN Security Council to build a global coalition to control the strait have stalled, leaving diplomacy and potential international policing as the most likely paths forward.