Hormuz Crisis Halts Shipping 🌍

TRADE NEWS

US–Israel–Iran conflict: Major Updates 

With so many developments unfolding in the US–Israel–Iran conflict, this week’s update is presented as a bullet-point briefing to keep the key information clear and direct. This is a fast-moving situation. Developments across the conflict are evolving rapidly, and shipping, energy and insurance conditions may change hour by hour.

Strait of Hormuz Effectively Shut Down 🚫

The single biggest development.

• Iran’s Revolutionary Guard warned ships no vessel is allowed to pass the Strait of Hormuz.

• Tanker traffic has collapsed with 150+ vessels stranded or anchored outside the strait.

• Several tankers have reportedly been damaged and at least one seafarer killed in attacks.

Implication

• The strait carries roughly 20% of global oil and LNG supply.

• Shipping traffic has slowed to near zero through the chokepoint.

• The largest maritime chokepoint disruption since the 2021 Suez Canal blockage, but affecting energy rather than container shipping.

Maritime Insurance Collapse ⚠️

Insurance is rapidly becoming the largest barrier to shipping in the Gulf.

• Major marine insurers including Gard, Skuld, NorthStandard and the London P&I Club have cancelled war-risk cover for voyages through the region.

• Premiums have surged from ~0.2% of vessel value to around 1% per voyage.

• A $100M tanker could now face around $1M in insurance costs for a single trip.

• US President Donald Trump signaled the US could step in to support shipping insurance if private insurers continue withdrawing coverage, similar to measures used in past wartime shipping crises.

Implication

• Even if ships are willing to sail, they cannot legally operate without insurance, effectively shutting down commercial traffic through the region.

World’s Largest Shipping Lines Suspend Operations 🚢

Container and tanker operators have halted Gulf transits.

• Major carriers including Maersk, MSC, CMA CGM, Hapag-Lloyd and COSCO have suspended sailings through Hormuz.

• Japanese shipping groups NYK, MOL and K-Line have ordered ships to remain in safe waters.

Implication

• Gulf ports such as Jebel Ali, Dammam and Abu Dhabi risk becoming temporarily isolated.

• Asia–Middle East container flows are rapidly freezing.

Freight Rates Exploding 📈

Shipping markets are already reacting.

• Freight rates on Persian Gulf tanker routes have surged up to 460% on some trades.

• Analysts warn rates could triple from current levels if disruption continues.

• Air freight markets are also tightening, with Asia–Europe air cargo rates rising more than 6% in a single week as shippers move urgent cargo away from disrupted ocean routes.

Energy Infrastructure Attacks Shut Down LNG & Refineries 🔥

The conflict is now targeting energy infrastructure across the Gulf.

• Qatar, the world’s second-largest LNG exporter supplying roughly 20% of global LNG trade, halted LNG production temporarily after attacks on major gas facilities.

• Saudi Arabia’s Ras Tanura refinery, one of the world’s largest oil export terminals, was partially shut down after drone strikes.

• A drone strike also hit energy infrastructure near Fujairah / Abu Dhabi, a major regional oil storage hub.

Energy Markets Shocked 🛢️

Energy markets reacted immediately.

• Brent crude jumped 10–13% to around $82 per barrel.

• European natural gas surged more than 39% in a single day.

Implication

• Analysts warn oil prices could break $100+ per barrel if the Strait of Hormuz remains closed.

• Higher oil prices effect global economies, raising fuel, transport and production costs worldwide.

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