by BAI Fan

Major shipping lines have halted Middle East bookings and begun diverting vessels after the Strait of Hormuz closed, stranding hundreds of tankers and container ships and raising fears of disruption to global trade.

The Strait of Hormuz, a narrow waterway between Iran and Oman, carries about 20% of the world's seaborne crude oil. More than 90% of oil exports from Saudi Arabia, Iraq, the United Arab Emirates and Kuwait pass through the strait, making it one of the most critical chokepoints in global energy trade.

Vessel traffic through the strait has slowed sharply since the blockade began on February 28. Normally about 40–100 vessels pass through the strait each day, but shipping-tracking firm Vortexa said recent traffic has fallen to single digits. Iranian officials say more than a dozen oil tankers had been hit by shelling by March 3, with further incidents involving container ships and tankers reported in the following days.

Hundreds of oil tankers, container ships and bulk carriers are stranded on either side of the strait, with some vessels reporting GPS interference and supply shortages.

Carriers suspend bookings and divert cargo

Major carriers including Maersk, Mediterranean Shipping Company (MSC), COSCO Shipping and Hapag-Lloyd have suspended bookings to the Middle East as the crisis deepens.

Maersk said several countries in the region — including the United Arab Emirates, Qatar, Bahrain, Kuwait, Iraq and Iran — had temporarily closed their airspace as a precaution and that it had suspended bookings for cargo to and from multiple ports across the Middle East.

MSC said ships carrying Middle East-bound cargo would terminate voyages early and discharge containers at the nearest safe port, while other carriers warned that shipments already loaded may be redirected to alternative ports.

Some vessels originally bound for the Persian Gulf have diverted to nearby ports in Pakistan or India, while others have rerouted around the Cape of Good Hope to avoid the risks surrounding the Strait of Hormuz and the Red Sea–Suez corridor. 

Shipping through the Red Sea has already been disrupted by attacks on vessels since late 2023, compounding pressure on one of the world’s most important trade routes between Asia and Europe.

Freight rates jump as disruption spreads

Freight forwarders say diverted shipments have created confusion over final destinations, with containers unloaded at intermediate ports such as Khor Fakkan in the UAE and customers often required to arrange onward transport themselves.

Freight rates are rising sharply. MSC has imposed a US$800 surcharge per container on affected cargo and will introduce an Emergency Fuel Surcharge (EFS) from April 1 of US$150 per TEU and US$350 per refrigerated container.

Industry sources say several carriers have suspended bookings to the Persian Gulf, while spot freight rates have jumped by US$1,000–2,000 per FEU, with additional war‑risk surcharges of as much as US$2,000–3,000.

Supply chain disruption spreads

Port congestion around Iran and neighboring countries has intensified as vessels divert or wait offshore. Several ports suspended operations earlier in the crisis, including Jebel Ali, the Middle East's largest container port operated by DP World.

Asian transshipment hubs including Singapore, Tanjung Pelepas in Malaysia and Port Klang are also expected to handle rising volumes of diverted cargo.

Air cargo and express delivery services have also been affected as regional airspace closures force flight cancellations and detours. Courier companies including FedEx, UPS and DHL have reported suspensions or delays across parts of the Middle East.

Analysts warn that a prolonged closure of the Strait of Hormuz could ripple across global trade, tightening shipping capacity and disrupting supply chains, particularly along the Asia–Europe trade corridor, one of the world's busiest maritime routes.