News Analysis | Global Economic and Trade 'Arteries' Encounter Obstruction - Interpretation of the Impact of the Middle East Situation on Global Shipping

The ongoing conflict between the United States, Israel, and Iran has lasted for over two weeks, severely disrupting shipping in the Strait of Hormuz, which is known as the "lifeline" of global shipping. This has triggered a chain reaction of soaring global shipping costs and adjustments to supply chain layouts. Some analysts warn that if the passage of the Strait of Hormuz continues to be paralyzed, the global logistics system will encounter the most devastating predicament since the outbreak of COVID-19.

Obstruction of arteries leads to navigation disorders

The Strait of Hormuz plays an important role in the global supply and transportation of oil and liquefied natural gas, and is a true "artery" in the global shipping system. According to the US Energy Information Administration, the daily transportation volume of crude oil and petroleum products in the Strait of Hormuz is estimated to be about 20 million barrels by 2025, with an annual energy trade volume of nearly $600 billion. Since the US Israel military strike on Iran, the security of this strategic channel has dropped to freezing point.

Due to the factual obstruction caused by the war, the traffic volume in the Strait of Hormuz plummeted sharply, and a large number of merchant ships were forced to stop or divert around the outer edge of the strait. According to Lloyd's Ship Information Service, only 77 ships passed through the Strait of Hormuz from March 1st to 13th. By comparison, from March 1st to 11th, 2025, 1229 ships passed through this strait.

Global shipping giants are taking evasive actions. Denmark's Maersk Line, Switzerland's Mediterranean Shipping Company, France's CMA CGM, and Germany's Hapag Lloyd have all announced the suspension or cessation of routes passing through the Strait of Hormuz, instructing their vessels to go to designated safe havens or choose to detour around the Cape of Good Hope in Africa.

Recently, the once busy Jebel Ali Port in Dubai was forced to temporarily suspend operations due to a fire caused by debris generated by aerial interception missiles. The Economist magazine in the UK analyzed that the damage caused by this "soft shutdown" is almost the same as that caused by a formal lockdown, and most operators are unable to maintain normal commercial navigation.

Multiple premiums drive up logistics costs

The prolonged war is driving up global shipping costs through three dimensions: freight, insurance, and fuel prices.

Due to the impact of detours and reduced transportation capacity, global sea freight rates have significantly increased. The circumnavigation of Cape of Good Hope resulted in an increase of approximately 3500 to 4000 nautical miles in range and an extension of transportation time by 10 to 14 days. The rental cost of a 20 foot standard container has increased by about $200, which means shipping costs have risen by about 15% to 20%. Dafei Shipping has started charging an "emergency conflict surcharge" ranging from $2000 to $4000 per container, and Hapag Lloyd's "war risk surcharge" is also as high as $1500 per TEU.

The reaction in the insurance market is particularly intense. As the conflict escalated, the marine insurance premiums for war insurance skyrocketed. Analysts from Jefferies Group in the United States pointed out that due to the value of most oil tankers ranging from $200 million to $300 million, a 3% new insurance rate means a ship war risk premium of approximately $7.5 million, while the pre conflict insurance rate is only 0.25%. Starting from March 5th, several maritime insurance companies have cancelled the standard war risk insurance for Gulf routes. If ship owners want to maintain navigation, they must pay extremely high premiums, with some quotes soaring to 10% of the ship's value. According to estimates, the single insurance expense for a super large oil tanker worth 138 million US dollars crossing the strait could reach up to 14 million US dollars.

The soaring fuel prices have directly increased operating costs. With the fluctuation and upward trend of international crude oil prices, the prices of ship fuel in major shipping hubs around the world have risen significantly. Maersk CEO Vincent Clare warns, "These price increases will be passed on to our customers, passed on to consumers

Global supply chain network under pressure adjustment

The passive adjustment of the shipping pattern is generating deep spillover effects, forcing the global supply chain to make corresponding layout adjustments.

The risk of breakage in the critical raw material supply chain is becoming increasingly prominent. The Middle East is not only an energy center, but also an important export destination for industrial raw materials such as aluminum and fertilizers. At present, about one-third of the world's urea needs to be transported through the Strait of Hormuz, and nearly half of the world's sulfur supply also comes from the Gulf region. The stagnation of shipping in the Strait of Hormuz has led to the risk of disruption in the global agricultural and chemical supply chains.

The precision manufacturing industry has also suffered heavy losses. Some analysts believe that due to the difficulty in coping with the additional two-week delay in round-trip transportation caused by inventory scale, automotive assembly plants in Germany, the United States, and other places are expected to feel the impact of Asian component supply delays within two to three weeks.

Faced with the interruption of sea routes, some high-value or time sensitive goods are turning to air freight. The air freight prices from South Asia to Europe have risen by about 70%, and this "cost shifting" is rapidly compressing the profit margins of the industry chain.

The United Nations Conference on Trade and Development recently warned that the disruption of transportation in the Strait of Hormuz highlights the vulnerability of maritime energy transportation routes to geopolitical tensions, which will have a huge impact on global supply chains and commodity markets.