What it means for global shipping

Escalating war in the Middle East has raised fears of prolonged disruption to global trade through key maritime corridors such as the Strait of Hormuz and Bab al-Mandeb Strait.

Container shipping giants suspended their operations in the strategically vital Strait of Hormuz and rerouted their ships to the southern tip of Africa after the US and Israel attacked Iran over the weekend.

Danish shipping company Maersk in question In the statement, it was warned that all ship passages in the Strait of Hormuz will be suspended until further notice and there may be delays in services calling to ports in the Persian Gulf.

The Strait of Hormuz, located in the gulf between Oman and Iran, is considered one of the most important oil transit points in the world. Oil will flow through waterways in 2023 average According to the U.S. Energy Information Administration, 20.9 million barrels per day account for about 20% of global liquid oil consumption.

Maersk, widely considered the barometer of global trade, said the situation in the Middle East had also led to the suspension of future trans-Suez services via the Bab el-Mandeb Strait until further notice.

This waterway is a narrow maritime pinch point between the Horn of Africa and the Middle East, connecting the Red Sea to the Gulf of Aden and the Indian Ocean. Bab el-Mandeb Strait estimated It will account for 12% of seaborne oil trade and 8% of liquefied natural gas (LNG) trade in the first half of 2023.

Maersk said all voyages to US services from the Middle East-India to the Mediterranean and from the Middle East-India to the east coast will be routed around the Cape of Good Hope.

Peter Sand, chief analyst at Xeneta, said higher container shipping rates should be taken into account for the Middle East region at least as long as the conflict continues, adding that there was “no real alternative” to ocean shipping.

“Geopolitical risk has reared its ugly head more frequently and more violently than ever before in recent years,” Sand told CNBC’s “Squawk Box Europe” on Monday. he said.

“It’s fair to say there’s a bit of fatigue in the industry as well, because you draw up 10 contingency plans and tear them all down because there’s a new twist and a new angle to this.”

Even if oil containers were only temporarily blocked from entering the Strait of Hormuz, this could increase global energy prices, increase shipping costs and cause significant supply delays.

The Strait of Hormuz is also key to global container trade. Ports in this region, such as Jebel Ali and Khor Fakkan, are hubs that serve as intermediary points in global networks.

In addition to the German container shipping company Maersk Hapag-Lloyd in question Over the weekend, it was announced that all ships transiting the Strait of Hormuz would be suspended, citing the safety and security of the crew.

CMA CGM of France in question On Saturday, he said he had instructed all of his ships in the Gulf to seek shelter in the area. Passage through the Suez Canal has also been suspended until further notice and ships have been diverted around Africa via the Cape of Good Hope, CMA CGM said.

MSC, the world’s largest container transportation company, in question He added that he ordered all ships operating in the Gulf region to go to designated safe areas on Monday and that he would closely monitor future developments.

The real question is what will happen to the Strait of Hormuz, Amrita Sen, founder and head of market intelligence at Energy Aspects, said on Monday.

He estimated that about 15 million barrels of oil and about 80 million tonnes of LNG passed through the waterway last year.

“We don’t think that’s very likely,” Sen told CNBC.Europe Early Edition” when asked if Iran wants to completely close the strait.