- The Israel-Iran conflict raises fears of a potential Strait of Hormuz closure, threatening global oil flows and freight market stability.
- Container shipping rates show mixed trends amid geopolitical tensions and ongoing China-US trade negotiations.
- Surge pricing, frontloading, and shifting demand patterns are impacting peak season container volumes and freight costs.
Though the ongoing conflict between Israel and Iran has not yet caused major disruption to freight markets, the possibility of a closure of the Strait of Hormuz continues to be a major concern. This narrow waterway between Iran and Oman is a strategic route for Persian Gulf countries, responsible for transporting nearly 20% of the world’s oil exports. Freightos analyst Judah Levine warned that any interruption in this region could significantly disrupt oil flows and global shipping routes, potentially spiking oil prices and unsettling freight markets, according to FreightWaves.
Oil Prices React to Escalating Tensions
Despite the elevated geopolitical risks, current global oil reserves are sufficient to offset immediate supply shocks. However, if the strait were to be blocked, the resulting disruption would cause significant rerouting of maritime traffic, adding volatility to oil and shipping markets. Oil benchmarks have already responded to the uncertainty—Brent crude opened at $72.20 per barrel, up from $66.80 before Israel attacked Iran. West Texas Intermediate rose to $72.92 per barrel, defying JP Morgan’s earlier 2025 forecast of $66.
Fuel Prices and Freight Surcharges Climb
Diesel prices, used as a baseline for most fuel surcharges, recorded their most substantial increase since January and the third-largest of the year. While only 2%–3% of global container trade transits the Strait of Hormuz, the regional impact could be significant. A closure would disrupt transshipment flows, particularly through Dubai’s Port of Jebel Ali—the Gulf’s busiest port. This could cause delays and congestion at alternative ports in South Asia, leading to increased freight rates, Levine noted.
Operational Resilience in the Face of Conflict
Despite missile threats from Iran, Israeli shipping line Zim confirmed that operations at its key ports, Haifa and Ashdod, continue unaffected. Meanwhile, container shipping rates across the trans-Pacific remain unstable due to ongoing geopolitical uncertainties and shifting trade dynamics.
Trade Negotiations Impact Trans-Pacific Freight
The fragile tariff truce between China and the U.S. is beginning to reflect in shipping demand. According to the Freightos Baltic Index, restored services and new sailings may have exceeded real demand, leading to underutilized vessel space. For the week ending June 13, rates from Asia to the U.S. West Coast climbed 9% to $5,994 per FEU, while East Coast rates rose 11% to $7,099. However, daily spot prices are already retreating, with West Coast rates falling 3% from the previous week’s average, signaling a possible market correction.
Tariff Pressures and Legal Challenges
Adding to the complexity, two U.S. firms have filed a lawsuit challenging the Trump-era tariffs, seeking expedited Supreme Court review. Meanwhile, a tentative trade deal could preserve a 30% tariff on Chinese imports and a 10% levy on U.S. exports. Levine said the anticipation of tariff changes led to early shipment frontloading, causing a temporary spike in container volumes that may now subside as the year progresses.
Peak Season Forecast and Surcharge Developments
If confirmed, the anticipated China-U.S. agreement could smooth shipment volumes over peak months, softening the urgency seen earlier in the year. Despite this, the National Retail Federation expects July imports to decline from April levels, reflecting diminished momentum following frontloading activities. Reflecting this volatility, carriers have announced new peak season surcharges: CMA CGM will charge $4,100 per container from Asia to Northern Europe, Maersk will impose $4,000 from the Indian Subcontinent and Middle East to the U.S. West Coast, and Hapag-Lloyd has set a $500 surcharge on similar routes to North America.
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Source: FreightWaves
