MW The Iran war is already the biggest threat to global shipping and supply chains since COVID

By Claudia Assis

The price of food, AI chips and more could rise as supply-chain disruptions touch industries across the spectrum

Shipping containers at the Shanghai port in January.

Iranian strikes on cargo ships and on Oman's biggest port have ratcheted up concerns about the global shipping business, adding another economic dimension to the conflict beyond higher energy prices.

The cost of shipping goods around the world is on the rise due to the situation in the Middle East. A composite index tracking spot global container-shipping prices is up 8% this week, and it's up nearly 12% since the start of the conflict in Iran.

While container cargo flows are nowhere near as dependent on the Strait of Hormuz as the shipment of crude oil and crude products, the overall crisis compounds supply-chain risks and costs. War is a growing threat to the global supply chain, already fragile after other recent geopolitical shocks and under pressure from the Trump administration's tariffs, said Antonella Teodoro, an economist and analyst at freight and logistics consultancy MDS Transmodal.

The Iran conflict is likely the most significant threat to global shipping and supply chains since COVID, she added.

Rising shipping costs could eventually be passed on to consumers. Some of the world's largest container shipping companies, such as Denmark's A.P. Moller-Maersk (DK:MAERSK.B) and Germany's Hapag-Lloyd (XE:HLAG), said they have halted several of their east-west shipping routes through the Suez Canal and the Red Sea, the gateway to the canal, due to safety concerns related to the war.

According to Teodoro, the conflict is less of a systemic demand-and-supply shock than the pandemic, but it represents a persistent and potentially long-lasting disruption affecting all shipping segments - container, dry bulk and oil tanker.

"If this crisis continues over an extended period, it could trigger a global energy shock, with rising oil and gas prices amplifying shipping costs and cascading through supply chains worldwide," she said.

The longer, and harder, way to ship goods

The fix to avoid the Red Sea crossing is a rerouting of ships around South Africa's Cape of Good Hope, but that adds days to trips. The shipping companies are also tacking on war and fuel surcharges to some of their routes and scrambling to offer pricier on-land options to their customers. But those are viewed as short-term fixes, not a solution.

Seaborne trade is the cornerstone of global commerce, moving more than 80% of the world's goods traded by volume, according to the United Nations Conference on Trade and Development.

One of the ripple effects is hitting the fertilizer business, which had already been operating with tight profit margins. The Middle East accounts for up to 40% of all urea fertilizer exports, a higher proportion than that of global crude exports coming from the region, meaning disruptions could eventually be felt in food prices as farming costs rise.

Companies across the board, beyond the shipping companies themselves, have instituted fuel surcharges.

Concerns have also emerged about helium supplies. Helium is used in the manufacture of semiconductors.

"Trade is like water - it will find a way," Teodoro said. "But it will be costly."

Cargo traffic through the Red Sea and Egypt's Suez Canal, the route of most goods from Asia to Europe, had been slowly getting back to normal from the disruptions it suffered in the late 2023 and early 2024. At the time, Iran-backed Houthi rebels in Yemen hijacked a commercial ship in the Red Sea and launched attacks on dozens of other vessels.

On Wednesday, the port of Salalah in Oman was attacked, and a fire broke out in its fuel-storage tanks, the Oman News Agency said. The port, in southeastern Oman on the Arabian Sea and some 700 miles removed from the Strait of Hormuz, is a major container port.

The attack in a port considered relatively safe has shaken people's confidence further, with concern that major ports on the Red Sea, such as Saudi Arabia's Jeddah, could be next, Teodoro said.

In addition to effects on the shipping trade, the widening Middle East conflict has resulted in equity and debt selloffs and jolts to energy markets, with crude rallying close to $120 a barrel on Monday and not budging from prices near $100 a barrel even after an announcement of largest-ever release of strategic oil reserves. U.S. gasoline prices have surged, with the national average price of regular gasoline jumping nearly 35 cents since last week to $3.598 a gallon. Crude futures are set to end the week up nearly 4% but were lower early Friday.

Iran's new supreme leader, Mojtaba Khamenei, in his first address Thursday, said Iran would keep the Strait of Hormuz closed. Consultancy Kpler estimated this week that about 400 oil tankers are stuck on either side of the strait. About 130 container ships are similarly stranded.

The cost of the conflict for shipping

Compounding the pain for the shipping trade, the conflict has pushed up prices of bunker fuel, which is used by ships. Bunker fuel is roughly 40% of shipping costs; concerns about rising fuel prices are part of what have dragged down shares of cruise-ship companies in recent sessions.

Prices vary by fuel type and by port in an opaque market, but, by way of example, bunker fuel at the port of Rotterdam, Europe's largest, cost $724 per metric ton on Feb. 27, the Friday before the start of the Iran conflict. They have jumped nearly 50% to $1,072 per metric ton as of Wednesday, according to OPIS pricing data.

Shipping companies expanded their fleets during the pandemic and had a couple of years to adapt after the Houthi crisis, and they had already diverted some of their shipping around the Cape of Good Hope.

Maersk, for example, had resumed some of its regular service through the Suez Canal in mid-January, some two years after avoiding that route because of the Houthi crisis.

The rerouting around Africa adds time and cost, as the trip is 10 to 15 days longer than through the Red Sea and the Suez Canal, depending on the final port of call in Europe.

And if a company wants to maintain a certain frequency - say, a once-a-week trip - it means that it needs to add two or three more ships to keep that schedule, relocating vessels and putting pressure on other shipping routes.

Spot container-shipping prices are on the rise. The Drewry's World Container Index increased 8% to $2,123 per 40-foot container this week. Shipping costs were falling earlier in the year, reflecting trade trepidation as fewer goods were being shipped due to Trump's tariffs.

And, illustrating the interconnectedness, the second-biggest rise for the Shanghai Containerized Freight Index, a weekly metric published by the Shanghai Shipping Exchange, was between the port of Shanghai and the port of Santos, Brazil, a route that went up more than 60% in price. That's because shipping companies are allocating fewer ships to Santos as they try to keep their routes to Europe supplied. The route from Shanghai to Middle East ports is up more than 70% in price.

Then there's a human cost: Thousands of mariners are stranded in the Middle East, with no possibility of relief. They have to remain at their posts for the duration of the crisis.

Hapag-Lloyd said it has roughly 150 seafarers on ships trapped in the Persian Gulf. It says the number of its ships held in the area is in the single digits, without elaborating further.

A Hapag-Lloyd container ship was one of the ships recently struck by Iran. The vessel was hit on Thursday by unknown fragments as it was near the port of Jebel Ali in United Arab Emirates, causing what the company said was a small fire but no injuries.

The ship, chartered to Maersk, was the seventh ship to be hit in the region in the past day, and at least 19 commercial ships have been hit or damaged in the Persian Gulf since the start of the conflict, the Wall Street Journal reported, citing the U.K. Maritime Trade Operations, a Royal Navy organization.

The mariners trapped in the region "are doing an outstanding job under very difficult circumstances," said Silke Lehmköster, managing director of Hapag-Lloyd's fleet.

"What we hear most often is the same question everyone has right now: How does this develop, and when can we move again safely? Many colleagues on board are experiencing a level of uncertainty they are not used to in commercial shipping," said Lehmköster, a former captain herself.

-Claudia Assis

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March 13, 2026 11:59 ET (15:59 GMT)

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