Q1 2026 Risk Report: Shipping’s Most Turbulent Quarter in 50 Years

At a Glance

• Strait of Hormuz traffic collapsed by 97%, stranding over 800 vessels and disrupting global oil flows.
• Vessel interdictions surged 160%, driven by enforcement against stateless and falsely flagged tankers.
• 290 tankers broadcast fraudulent flags, with 88% linked to Western sanctions.
• GPS jamming reached nearly 1 million incidents, impacting over 1,100 vessels.
• The shadow fleet expanded to 2,108 vessels, with 65.5% now sanctioned.

A Quarter Defined by Geopolitical Shock

On February 28, the Iran war effectively closed the Strait of Hormuz. Within days, daily traffic through the world’s most critical oil chokepoint collapsed from roughly 120 vessels to a trickle — a 97% drop that left more than 800 ships stranded west of the strait, thousands of seafarers in limbo, and Asian refiners scrambling for crude that could no longer reach them.

It was not the only shock. The quarter opened with the capture of Venezuelan president Nicolás Maduro, the culmination of a six-week U.S. naval blockade designed to choke off sanctioned oil exports. Within weeks, Washington controlled PDVSA, Venezuelan crude was being redirected to U.S. and European buyers under new licenses, and the blockade had extended to Cuba, where the loss of Venezuelan oil imports plunged the island into rolling blackouts.

Between these two crises, the machinery of global shipping was tested as it has not been in a generation: enforcement agencies moved faster, shadow fleet operators moved faster still, and the gap between U.S. and European sanctions policy widened. What follows is the quarter in numbers, and what those numbers suggest about the rest of 2026.

From Venezuela to Cuba: Blockades Expand

The quarter began with the capture of Venezuela’s president, Nicolás Maduro, following a six-week U.S. blockade aimed at preventing Western-sanctioned tankers from exporting the country’s oil. Choking off revenues not only drove regime change but also led to U.S. control of the national oil company, PDVSA. Licenses quickly redirected Venezuela’s crude exports to new markets, including the U.S., Europe, and India, by the quarter’s close.

The blockade then extended to Cuba, cutting off critical oil imports needed for electricity generation and leading to widespread blackouts.

Enforcement Escalates: Interdictions and Legal Precedents

The blockade drove a global record in vessel interdictions targeting stateless and falsely flagged shadow fleet tankers.

Stateless tankers that evaded the Venezuelan blockade were tracked and detained across the Atlantic and Indian Oceans in January. In doing so, the U.S. demonstrated to EU governments a legal template for addressing Russia’s sanctions-circumventing fleet operating in their coastal waters.

The UK, France, Sweden, and Belgium all detained tankers during the quarter. Thirteen ships were boarded and detained, up 160% from the prior quarter, accounting for half of all interdictions seen across 2025 and 2026. Of these, 92% were sanctioned and 85% falsely flagged.

By April, the interdiction window had nearly closed, as stateless tankers rapidly reflagged to legitimate registries, ending their immediate legal vulnerability.

The Rise of Fraudulent Registries

False flagging remains one of shipping’s most pressing regulatory concerns.

Some 290 internationally trading tankers were broadcasting fraudulent registry flags as Q1 closed, broadly in line with the 285 identified in Q4 2025. Windward identified 20 fraudulent registries, as defined by the International Maritime Organization (IMO).

88% of vessels using fraudulent registries were Western-sanctioned, underscoring the mounting pressure on dark fleet operators to secure regulatory cover.

The most frequently used fraudulent registry was the Netherlands Antilles (52 vessels), followed by Guyana (43), Guinea (28), and Madagascar (24).

Two new registries — Nicaragua and Equatorial Guinea — emerged during the quarter.

The IMO database listed 550 falsely flagged ships, up from 470 in the prior quarter, including 367 tankers.

Sanctions Divergence and Policy Friction

Despite a tougher stance on Russia, the EU failed to advance its 20th sanctions package after Hungary vetoed the proposal in February. However, the ban on EU imports of refined products derived from Russian crude, part of the 18th package, came into effect in January.

Global vessel sanctions slowed slightly, with 851 designations in Q1, down 8% quarter-over-quarter. The EU made no designations, while the UK and U.S. added 38 and 39 vessels respectively.

Australia led with 43% of designations, followed by Canada (26%) and Switzerland (5%). Tankers accounted for 94% of all designations.

Policy divergence between the EU and U.S. widened further during the Hormuz crisis, testing the G7 Oil Price Cap as oil prices surged. The U.S. issued temporary waivers for Russian and Iranian oil cargoes already at sea, benefiting major importers such as China and India, as well as sanctioned shadow fleet operators.

Maritime Security and Disruption Intensify

Security risks remained elevated. Ukraine’s drone attacks on Russia-linked tankers continued in the Black Sea and Mediterranean and expanded to key Baltic export terminals.

Meanwhile, Houthi threats in the Red Sea continued to deter Western-affiliated vessels.

GPS jamming surged sharply, with 978,000 incidents recorded in Q1. 98% occurred in the Middle East, impacting more than 1,100 vessels. Additional disruption hotspots included the Black Sea, South China Sea, Baltic, Mediterranean, and Russian export terminals.

Market Recalibration and Rising Costs

Tanker traffic began to recalibrate as oil flows shifted, pushing freight rates to record levels. While only a few vessels reached $350,000 per day, most internationally trading tankers saw sustained six-figure earnings.

The shadow fleet expanded by 45 vessels to 2,108, with 65.5% now sanctioned.

By quarter-end, more than 800 vessels remained trapped west of Hormuz. The U.S. later imposed a blockade on ships trading with Iranian ports, directly targeting the shadow fleet transporting Iranian oil.

Prior to the blockade, Iran exported approximately 1.77 million barrels per day using deceptive shipping practices, including AIS spoofing and signal manipulation.

Oil Flows Collapse

Global crude loadings fell 7.5% quarter-over-quarter to 41.1 million barrels per day, driven by a 76% month-over-month drop in March exports west of Hormuz.

Of the 142.5 million barrels loaded from the region in March, 128 million remained in transit or floating storage due to the closure of the Strait.

Saudi Arabia partially offset the disruption by diverting crude through its east-west pipeline to the Red Sea port of Yanbu, increasing exports from the port by 330%.

Looking Ahead

The quarter ended with more questions open than closed. Four deserve close tracking:

The status of Hormuz: Commercial traffic is unlikely to return to anything resembling pre‑war norms without a political settlement, and the shape of that settlement — who controls transit, under what terms, with what inspection regime — will determine whether the strait resumes its prior role or settles into a contested waterway.

The shadow fleet’s response to the Iran blockade: Before the blockade took effect, Iran was exporting on the order of 1.7–1.8 million barrels per day, with a large share moved via deceptive shipping practices. How that volume is absorbed — through reflagging, new concealment methods, or displacement to other sanctioned trades — should be visible in the Q2 data on fraudulent registries and AIS manipulation.

Western sanctions cohesion: Hungary’s veto of the EU’s 20th package, combined with U.S. waivers on Russian and Iranian cargoes already at sea, produced one of the sharpest policy divergences between the two jurisdictions since the G7 Oil Price Cap was introduced. Whether that gap narrows, holds, or widens further in Q2 remains to be seen.

The interdiction template: January’s detentions relied on a narrow legal window: stateless vessels in international waters. That window has been narrowing as operators reflag to more credible registries. Whether a new template emerges, and from which jurisdiction, is an open question.

Fifty years after the global economy reeled from a Middle East oil embargo, this quarter has opened a new inflection point, one that will influence maritime risk, enforcement, and trade flows through the remainder of 2026.