Strait of Hormuz Crisis: Impact on Global Shipping and Freight

Situation Update

Further to our previous advice, the situation in the Middle East has significantly escalated, specifically around the Strait of Hormuz which provides a shipping corridor for around 20% of global oil and LNG supply.  The ongoing conflict is now causing sustained and severe disruption to global trade flows.

Recent developments indicate that the Strait has been effectively closed or is operating at severely reduced capacity since late February, following targeted attacks on vessels and heightened military activity.

As of this week, vessel transits remain critically constrained, with reports that approximately 1,000 vessels are stranded or delayed in the region.  Major shipping companies have suspended transits and bookings, particularly for routes going through the Gulf region.  Furthermore it has been reported that insurance has been withdrawn or significantly restricted due to the deteriorating war risk conditions. 

Impact on Sea Freight

Sea freight conditions remain highly volatile and constrained:

• Route suspensions and diversions are ongoing, with vessels re-routing via longer alternatives (e.g. around the Cape of Good Hope)
• Port congestion is intensifying across key Middle East hubs due to stranded and diverted cargo
• Freight rates and war risk surcharges have surged sharply
• Container shortages in the region and cancelled sailings to specific ports are increasing across Asia–Europe and intra-regional lanes

Impact on Air Freight

Air freight markets are also experiencing secondary disruption effects:

• Fuel costs have risen significantly, driving upward pressure on airfreight rates
• Capacity is tightening as cargo shifts from ocean freight to air freight to mitigate delays
• Increased demand for urgent shipments is creating volatility in pricing and space availability

Overall, the conflict is triggering a multi-modal supply chain shock, not limited to ocean freight alone.

Wider Global Trade & Economic Impact

The disruption is now extending beyond logistics into broader economic conditions.  It was reported that global trade growth forecasts have been downgraded significantly for 2026.  Energy prices have already surged, impacting transport, manufacturing and procurement costs globally.  Supply chains are increasingly uncertain, particularly as reported in sectors such as automotive, industrial and retail.

Outlook

At this stage, there is no confirmed timeline for normalisation.  Diplomatic efforts are underway involving multiple nations to restore safe passage however the situation remains politically complex and unresolved.  Any re-opening is expected to be gradual and operationally constrained.  It has been reported that Iran has diverted some vessels that are willing to transit through safer corridors within Iranian territorial waters after being verified and approved as “non-hostile vessels, although there may be an unverified escalation of cost to take this route and safety is not guaranteed.  Expect on-going volatility across Q2 2026 and potentially beyond.

Advice from Clarke Global Logistics

We recommend that clients take the following action:

• Plan for extended transit times across all affected trade lanes
• Review supply chain routing options, including alternative ports and corridors
• Secure bookings early to mitigate capacity constraints
• Consider mode diversification, including selective use of air freight for critical cargo
• Engage closely with our team for real-time updates and contingency planning

Clarke Global Logistics continues to monitor developments closely and is actively working with carrier partners and global networks to minimise disruption for our clients. For shipment-specific advice or contingency planning, please contact the team at Clarke Global Logistics on +61 3 9854 3000 or send an email to enquiry@clarkeglobal.com.au