Iran War and Global Shipping: Hormuz Closure, Rate Spikes, and What's Next

On February 28, 2026, a joint US-Israeli military operation struck Iranian nuclear facilities and missile infrastructure, setting off the most severe disruption to global shipping since the Suez Canal blockage of 2021. Within 48 hours, Iran closed the Strait of Hormuz to Western-allied vessels. Three weeks later, 700+ ships remain stranded, container rates have surged 28.3%, and the energy market is still reeling from Brent crude touching $126 per barrel. For any company that moves goods by sea, the consequences are immediate and ongoing.

The Hormuz Closure

Timeline of Events

• February 28: US-Israel joint strikes target Iranian nuclear and missile sites.
• March 1: Iran's Supreme Leader Khamenei confirmed dead.
• March 2: Iran announces full closure of the Strait of Hormuz to Western-allied shipping.
• March 5: Iran narrows the blockade scope to US, Israeli, and Western-ally flagged or destined vessels only.
• March 2-12: 21 confirmed attacks on merchant vessels transiting or near the strait.
• March 23: President Trump announces a 5-day strike pause. Reports emerge of a Swiss-mediated de-escalation framework.

Blockade Mechanics

The Strait of Hormuz is a 21-nautical-mile-wide chokepoint between Iran and Oman. Under normal conditions, it handles 20 million barrels per day of crude oil — roughly 20% of all seaborne oil — plus 20% of global LNG shipments. Since the closure, traffic through the strait has dropped by approximately 70%. Only 21 tankers have transited since February 28, compared to the typical 100+ per day.

Iran's initial blanket closure on March 2 created maximum disruption. The narrowing on March 5 to target only US/Israel/Western-ally vessels was a calculated move: it allowed Iranian trade partners (notably China and India) to continue receiving oil while maintaining strategic pressure on Western supply chains.

Rate Impact by Trade Lane

The conflict's effect on freight rates has been sharp and uneven. Trade lanes with direct Gulf exposure saw the fastest spikes, but the diversion of capacity around the Cape of Good Hope has rippled across every major route.

The Asia-Gulf lane tells the starkest story: rates doubled in 48 hours. This route feeds the UAE, Saudi Arabia, and broader Middle Eastern import markets. With direct Hormuz transit effectively cut off for Western-allied carriers, vessels must either wait or reroute entirely.

Roughly 10% of the global container fleet is currently impacted by conflict-related diversions, creating a capacity squeeze that extends well beyond the Gulf region.

Carrier Responses

CMA CGM

CMA CGM had briefly returned vessels to the Suez Canal route in late January 2026, signaling a tentative return to normalcy after the prolonged Red Sea crisis. That decision was reversed almost immediately. With the Hormuz closure compounding Red Sea risks, CMA CGM pulled back to Cape routing, absorbing the additional 10-14 days of transit time and roughly 30% more fuel cost per voyage.

Maersk

Maersk diverted its ME11 service vessels back to the Cape of Good Hope on both March 5 and March 12. The ME11 service connects Asia to the Middle East and Mediterranean, making it one of the most directly exposed rotations. The Cape diversion adds an estimated $200-$800 per container in additional costs depending on vessel size and fuel price.

Hapag-Lloyd

Hapag-Lloyd moved quickly on surcharges. The carrier implemented a War Risk Surcharge of $1,500 per TEU for standard containers, rising to $3,500 per container for reefer units. Reefer surcharges reflect the higher value of perishable cargo and the compounded risk of delay on temperature-sensitive shipments.

Insurance and Risk

The insurance market's response has been more disruptive than the surcharges. P&I Clubs have cancelled war risk cover for vessels transiting the Persian Gulf. Marine war risk insurance for Hormuz transit is now nearly unobtainable at any price from major underwriters.

This matters because without war risk cover, a vessel transiting the strait is effectively uninsured for the most likely cause of loss. No responsible shipowner will send a vessel into a war zone without hull and cargo coverage, which means the insurance withdrawal acts as a de facto blockade on top of the physical one.

The Red Sea corridor remains equally problematic. Container transits through the Suez Canal are down 86% compared to 2023 levels, a situation driven by the ongoing Houthi threat that predates the Iran conflict but has been intensified by it.

When underwriters pull war risk cover, the physical ability to transit becomes irrelevant. Insurance availability is now the binding constraint on Gulf shipping, not naval capacity.

What's Next

De-escalation Signals

The March 23 announcement of a 5-day US strike pause and reports of a Swiss-mediated de-escalation framework are the first meaningful signals of potential normalization. However, several conditions must be met before shipping returns to pre-conflict patterns:

• Formal lifting of the Hormuz blockade — Iran must explicitly reopen the strait, not merely reduce attacks.
• Mine clearance confirmation — if Iran deployed naval mines, international mine countermeasure operations will take weeks.
• Insurance market re-entry — P&I Clubs and war risk underwriters need sustained calm (typically 30-90 days without incidents) before reinstating cover.
• Carrier confidence — even after insurance returns, carriers will wait for peer moves before committing expensive assets back to Gulf routes.

Likely Scenarios

Best case (4-8 weeks): Ceasefire holds, blockade lifts, insurance gradually returns. Rates normalize over Q2. Cape diversions unwind by May.

Base case (3-6 months): Partial de-escalation with intermittent Hormuz transits. Insurance remains expensive. Rates stay elevated through summer peak season. Gulf-exposed lanes run 40-60% above pre-conflict levels.

Worst case (6+ months): De-escalation fails, conflict escalates, or Iran deploys mines. Full Cape rerouting becomes the new normal. Global container capacity contracts further. Rates reach 2021 crisis levels.

What Shippers Should Do Now

1. Audit Gulf exposure immediately. Identify every shipment with origin, destination, or transshipment in the Persian Gulf, Gulf of Oman, or Red Sea corridor. Know exactly which bookings are at risk.
2. Lock in contract rates where possible. Spot rates are volatile and climbing. If your carrier offers short-term contract extensions at current levels, consider taking them — rates may not come down for months.
3. Build buffer into lead times. Add 14-21 days to any shipment touching the Middle East or transiting between Asia and Europe. Cape diversions are not optional — they are the default routing now.
4. Review insurance coverage. Confirm with your cargo insurer that your policy covers war risk for current conflict zones. Standard marine cargo policies often exclude war, strikes, and civil commotion unless specifically endorsed.
5. Diversify transshipment hubs. If you rely on Jebel Ali, Salalah, or other Gulf transshipment ports, identify alternatives in Singapore, Colombo, or Tanjung Pelepas that avoid the conflict zone entirely.
6. Monitor surcharges weekly. Carrier surcharges are changing on short notice. Hapag-Lloyd's war risk surcharge alone adds $1,500-$3,500 per box. Build surcharge tracking into your procurement workflow.
7. Scenario-plan inventory. If you depend on Middle Eastern petrochemical feedstocks, Gulf-sourced energy, or Asia-Europe container capacity, model what a 3-month and 6-month disruption does to your supply chain and stock levels.

The shippers who navigate this crisis best will be those who acted on data in the first week, not those who waited for the situation to resolve itself.

Last updated: March 24, 2026. ShippingRates continues to track rate movements, carrier advisories, and geopolitical developments affecting global trade lanes. Data accessible via our API and Dashboard.