Maritime & Oil Trading Glossary
Clear, jargon-free definitions of the shipping, energy, and insurance terms you will encounter on this dashboard and in coverage of the Strait of Hormuz disruption.
A
AIS (Automatic Identification System)
A radio-based tracking system that broadcasts a ship's identity, position, speed, and heading to nearby vessels and shore stations. Mandated by the International Maritime Organization for most commercial ships. During crises, vessels sometimes disable their AIS transponders to avoid detection, making traffic counts unreliable.
See live ship count →Aframax
A medium-sized oil tanker with a capacity of roughly 80,000 to 120,000 dead weight tonnes, able to carry around 750,000 barrels of crude oil. The name comes from the Average Freight Rate Assessment scale. Aframax tankers are commonly used on shorter routes where ports or canals cannot accommodate larger vessels.
B
Bab el-Mandeb
A narrow strait between Yemen and Djibouti connecting the Red Sea to the Gulf of Aden. Roughly 20 miles wide at its narrowest point. It is one of the world's key maritime chokepoints, and disruptions here (as seen during the 2023-24 Red Sea shipping crisis) can force ships onto far longer routes around Africa.
Barrel (bbl)
The standard unit of measurement for crude oil, equal to 42 US gallons (approximately 159 litres). Global oil markets quote prices per barrel. Daily world consumption is roughly 100 million barrels, of which about 20 million pass through the Strait of Hormuz on a typical day.
See current oil prices →Brent Crude
The primary international benchmark for oil pricing, originally named after the Brent oilfield in the North Sea. Brent is used to price roughly two-thirds of the world's traded crude oil. When a shipping disruption restricts supply from the Persian Gulf, Brent prices tend to rise sharply because markets anticipate reduced global availability.
See current oil prices →Bunkering
The process of supplying fuel (bunker fuel) to a ship for its engines, boilers, and generators. Bunkering typically takes place at major ports or dedicated offshore terminals. Disruptions to shipping routes can increase bunkering costs because vessels must carry more fuel for longer diversionary voyages.
Bunker Fuel
The heavy fuel oil or marine diesel used to power ocean-going vessels. It is one of the largest operating costs for shipowners. When oil prices spike due to a chokepoint disruption, bunker fuel costs rise in tandem, driving up freight rates across the entire supply chain.
C
Cape of Good Hope Route
The alternative shipping route around the southern tip of Africa, used when the Strait of Hormuz, Suez Canal, or Red Sea passages are unavailable. Rerouting via the Cape adds roughly 10 to 14 days and thousands of nautical miles to a typical Persian Gulf-to-Europe voyage, significantly increasing fuel consumption and freight costs.
Calculate reroute costs →Chokepoint
A narrow stretch of water through which a large volume of maritime traffic must pass. The world's most critical energy chokepoints include the Strait of Hormuz, the Strait of Malacca, the Suez Canal, and Bab el-Mandeb. A disruption at any one of these can ripple across global trade and commodity markets within days.
Container Surcharge
An additional fee imposed by shipping lines on top of the base freight rate, often triggered by emergencies, fuel price spikes, or route diversions. During the Hormuz disruption, carriers announced emergency surcharges ranging from $1,500 to $4,000 per TEU to cover increased costs and elevated risk.
See carrier surcharges →D
Dead Weight Tonnage (DWT)
The total weight a ship can safely carry, including cargo, fuel, fresh water, crew, and provisions. Expressed in metric tonnes. DWT is the standard measure for comparing the carrying capacity of tankers and bulk carriers. A VLCC, for example, typically has a DWT of 200,000 to 320,000 tonnes.
Demurrage
A daily charge levied when a vessel is delayed beyond the agreed time for loading or unloading cargo. Demurrage costs can be substantial: a VLCC may incur $40,000 to $80,000 per day in demurrage. When ships are stranded or waiting outside a closed strait, demurrage bills accumulate rapidly for cargo owners.
F
Flag State
The country under whose laws a vessel is registered and whose flag it flies. The flag state is responsible for enforcing maritime regulations on its ships. During chokepoint crises, some flag states may negotiate selective transit rights, while others face blanket restrictions.
Force Majeure
A legal clause that frees parties from contractual obligations when extraordinary events beyond their control occur. In the context of the Hormuz disruption, several LNG and oil exporters have declared force majeure on supply contracts, meaning they cannot deliver agreed volumes because the shipping route is closed.
Freight Rate
The price charged by a shipping company to transport cargo from one port to another. Freight rates are influenced by fuel costs, route distance, vessel availability, and risk premiums. A major chokepoint closure can cause freight rates to double or triple within days as available capacity shrinks and costs surge.
I
IMO (International Maritime Organization)
A specialised agency of the United Nations responsible for the safety, security, and environmental performance of international shipping. The IMO sets standards for vessel construction, navigation, and crew training. Each commercial ship is assigned a unique IMO number for identification purposes.
K
Knot
A unit of speed equal to one nautical mile per hour (approximately 1.15 miles per hour or 1.85 kilometres per hour). Most large commercial vessels cruise at 12 to 16 knots. Speed is relevant during diversions: ships may slow-steam on longer routes to conserve fuel, extending delivery times further.
L
LNG Carrier
A specialised tanker designed to transport liquefied natural gas at approximately minus 162 degrees Celsius. Qatar, the world's largest LNG exporter, ships nearly all of its output through the Strait of Hormuz. When the strait is closed, LNG supply to Europe and Asia is directly curtailed, driving up gas prices.
See gas price impact →P
P&I Insurance (Protection and Indemnity)
Mutual insurance that covers a shipowner's liability for third-party claims, including cargo damage, crew injury, pollution, and wreck removal. P&I clubs are the cornerstone of maritime risk coverage. When P&I clubs withdraw war risk cover for a region, ships effectively cannot transit because ports, banks, and charterers refuse to accept uninsured vessels.
See insurance status →Panamax
The largest vessel size that can transit the original Panama Canal locks, generally up to about 80,000 DWT for tankers or roughly 5,000 TEU for container ships. The newer Neopanamax locks accommodate larger vessels. Panamax is one of the standard size categories used in shipping rate assessments.
S
Signal Interference
The deliberate or incidental disruption of electronic signals, including AIS, GPS, and radio communications. In high-risk maritime zones, signal jamming or spoofing can degrade vessel tracking data, making it difficult for maritime authorities to know how many ships are in an area or where they are heading. This reduces the reliability of any ship count.
See AIS reliability note →Strait of Hormuz
The narrow waterway between Iran and Oman that connects the Persian Gulf to the Gulf of Oman and the open ocean. At its narrowest, it is roughly 21 nautical miles wide with two one-mile-wide shipping lanes. Approximately 20 percent of the world's oil supply and a quarter of global LNG trade pass through it daily, making it the most critical energy chokepoint on earth.
See live dashboard →Suezmax
The largest vessel size that can transit the Suez Canal fully laden, typically around 120,000 to 200,000 DWT for tankers. Suezmax tankers are a common workhorse of the international oil trade. Their routing options are directly affected when both the Hormuz and Suez passages face disruptions simultaneously.
T
Tanker Rate
The cost of chartering an oil tanker, usually quoted per day (time charter) or per voyage. Tanker rates are highly sensitive to supply disruptions: when a chokepoint closes and vessels are stranded or rerouted, the effective fleet size shrinks and rates spike. During the Hormuz crisis, VLCC spot rates surged as available tonnage dropped.
TEU (Twenty-foot Equivalent Unit)
The standard unit for measuring container ship capacity, based on the dimensions of a 20-foot shipping container. A large container ship can carry over 20,000 TEU. During the Hormuz disruption, carriers imposed emergency surcharges of $1,500 to $4,000 per TEU, directly increasing the cost of imported consumer goods.
See carrier status →Throughput
The volume of cargo or number of vessels passing through a port, terminal, or waterway in a given period. Strait of Hormuz throughput averages roughly 138 vessel transits per day under normal conditions. A drop in throughput is the primary indicator of a shipping disruption's severity.
See live ship count →Transshipment Hub
A major port where cargo is transferred between ships rather than being delivered to its final destination. Jebel Ali (Dubai) is one of the world's largest transshipment hubs and sits inside the Persian Gulf. When the Strait of Hormuz is closed, cargo bound for or originating from Gulf transshipment hubs must be rerouted entirely.
TTF (Title Transfer Facility)
The main European natural gas benchmark, operated by the Dutch exchange ICE Endex. TTF prices are quoted in euros per megawatt-hour. When LNG shipments through the Strait of Hormuz are disrupted, TTF prices spike because Europe depends heavily on waterborne gas imports to supplement pipeline supply.
See gas price impact →U
UKMTO (United Kingdom Maritime Trade Operations)
A Royal Navy unit that serves as the primary point of contact for merchant vessels in high-risk maritime areas. UKMTO issues navigational warnings, collects incident reports, and coordinates with naval forces to protect commercial shipping. During the Hormuz disruption, UKMTO advisories have been a key information source for shipowners.
ULCC (Ultra Large Crude Carrier)
The largest class of oil tanker, with a dead weight tonnage exceeding 320,000 tonnes and the ability to carry over 2 million barrels of crude. ULCCs are used on long-haul routes where economies of scale justify their size. Very few ports can accommodate them, and their diversion around the Cape of Good Hope incurs enormous additional fuel costs.
V
VLCC (Very Large Crude Carrier)
A large oil tanker with a capacity of roughly 200,000 to 320,000 dead weight tonnes, capable of carrying about 2 million barrels of crude oil. VLCCs are the workhorses of the Persian Gulf oil trade. War risk insurance for a single VLCC Hormuz transit surged from around $125,000 to up to $1,000,000 during the current crisis.
See insurance premiums →W
WTI Crude (West Texas Intermediate)
The primary oil price benchmark for the United States, based on light sweet crude oil delivered to Cushing, Oklahoma. While WTI is a domestic benchmark, it closely tracks global disruptions. A Hormuz closure pushes WTI higher because global supply tightens, even though most US oil does not transit the strait.
See current oil prices →Definitions are written for general audiences and simplified for clarity. For regulatory or contractual precision, consult the relevant IMO conventions, charter-party terms, or insurance policy wording.