Gunfire reported after Iran's foreign minister declares Strait of Hormuz "completely open", auto supply chain becomes clearer
Iran's foreign affairs minister, Seyed Abbas Araghchi, claimed on April 17 that Iran had declared passage through the Strait of Hormuz "completely open", but just a day later, there were reports of two vessels coming under fire. This news comes as more details have emerged regarding the impact of disruption on automotive supply chains.
In a post on social media platform X on 17 April, Seyed Abbas Araghchi, Iran's minister of foreign affairs stated: "In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire, on the coordinated route as already announced by Ports and Maritime Organisation of the Islamic Rep. of Iran."
Responding to this announcement, US president Donald Trump – declaring it a "great and brilliant day for the world" – explained in his own social media posts that the US' naval blockade of Iran's ports would remain in effect until such time as its deal with Iran in 100% complete. He also claimed that with the US' help Iran "has removed, or is removing, all sea mines" from the Strait of Hormuz.
The announcement from Iran's Ministry of Foreign Affairs came as the governments of the UK and France chaired a summit to discuss the reopening of the Strait of Hormuz. Joined virtually by leaders from around 49 countries, and representatives of the International Maritime Organisation (IMO), UK prime minister Keir Starmer and French president Emmanuel Macron came together in Paris to lead the summit.
"We welcome the announcement that was made during our meeting, but we need to make sure that this is both a lasting and workable proposal," Starmer said at a press conference in Paris, emphasising the need for the strait to be reopened on a long-term basis with no tolls and no restrictions.
"We need to manage the economic shock by avoiding unnecessary trade restrictions, supporting energy and food security, and supporting industry so that shipping can resume as soon as conditions permit," he added.
Standing alongside Starmer, Macron joined him in welcoming the strait's opening and demanding assurances as to the long-term stability of the flow of commercial vessels in the region.
"We call for the immediate, unconditional and full reopening of the Strait of Hormuz by all parties," Macron said. "We call for the restoration of the conditions of free passage that were in force prior to the war and for the full respect for the law of the sea. We oppose any restriction or agree-based regime that would in effect amount to an attempt to privatise the strait and, of course, any toll system."
During his address at the summit, IMO sectretary-general Arsenio Dominguez reinforced that "the principle of freedom of navigation is not negotiable [and] any deviation from these well-established and recognised principles would set a negative precedent and severely undermine the integrity and stability of shipping operations worldwide."
Just one day after the announcement of the supposed opening of the Strait of Hormuz, with the US' naval blockade of Iranian ports remaining, there were reports of at least two merchant vessels claiming to have been hit by gunfire while attempting to cross the strait. It is estimated that more than 20 vessels managed to pass through the Strait of Hormuz on April 18, carrying cargo ranging from oil to metal products.
Nils Haupt, senior director of group communications at global shipping company Hapag-Lloyd, told Automotive Logistics on April 17 that the opening of the Strait of Hormuz would be "good news" but acknowledged that there were still some open questions that needed to be resolved, and asserted the safety and security of its seafarers and its customers' cargo remains the company's top priority. Automotive Logistics has contacted Hapag-Lloyd for an updated statement.
Action taken by Japanese OEMs in response to disruption so far
The impact of disruption in the Middle East on automotive supply chains around the world has become even clearer, with Mazda making the decision in early April to suspend production of vehicles bound for markets in the Middle East until at least May, according to reports. Exports to the region were suspended in March in response to the ongoing conflict and inaccessibility of the Strait of Hormuz.
Vehicle production for these markets was then paused in April. A spokesperson for the company has stated that it will increase exports to Europe and other markets to ensure its plan for vehicle production volumes is maintained. Flexible decisions will be made from June onwards, depending on the situation by then, the Mazda spokesperson added.
There have also been reports of the situation in the Middle East impacting other Japanese OEMs including Toyota and Suzuki. Toyota is understood to have reduced production for the Middle East by 40,000 vehicles in April, although this figure has not been confirmed by the automaker.
Suzuki, on the other hand, has said that its vehicle production volumes have not been reduced, but it has changed the destination of vehicles produced in Japan from the Middle East to other regions such as Africa.
While initial reports focused on the impact of the war on shipping and global logistics, we are now beginning to see evidence of how disruption has hit OEMs further upstream. It is not yet clear how the latest developments in the Strait of Hormuz will affect the decisions of these automakers.
