International freight traffic dynamics

The Impact of the Iran Conflict on the Maritime Shipping Market

Currently, the Xi'an-Iran freight train service is operating normally; capacity for the March 20th departure is fully booked, while the schedule for the next departure remains pending.
Oil Shipping Market: Widening Supply-Demand Mismatch and Freight Rates Moving in Tandem with Oil Prices

The effective suspension of transit through the Strait of Hormuz has directly triggered a crisis regarding the supply-demand imbalance in the global oil tanker shipping market.
Plummeting Traffic and Supply Shocks: Data indicates that vessel traffic through the Strait plummeted by over 80% at one point, resulting in an instantaneous drop of more than 15% in the volume of seaborne oil trade. As the indispensable gateway for approximately 20% of the world's seaborne oil and 30% of its seaborne oil trade—handling an average daily throughput of about 20 million barrels of crude oil and condensates—any disruption to this route carries massive repercussions.

Soaring Freight Rates and Contracting Effective Capacity: A significant portion of shipping capacity has been effectively "frozen." Currently, over 100 oil tankers and 90 container ships are stranded within the Gulf region, unable to enter or exit. This has led to a substantial reduction in the effective capacity of the global oil tanker fleet, further driving up freight rates and charter costs on alternative routes (such as the U.S. Gulf-Asia and West Africa-Asia lanes); the market is currently characterized by a frenzied scramble to secure both vessels and oil cargo.

Linkage with Oil Prices and Long-Term Risks: Following the closure of the Strait, international oil prices reacted swiftly, with Brent crude briefly breaching the $80-per-barrel mark. Analysis by Goldman Sachs suggests that if the disruption persists for anywhere from a few weeks to two months, the baseline price for oil could rise to $93 per barrel by year-end; in an extreme scenario, prices could even surge to the historical peak of $140 per barrel—a cost increase that would subsequently ripple through to all sectors of the shipping industry via rising bunker fuel expenses.
Container and Dry Bulk Shipping: Indirect Ripple Effects—Dual Pressure on Costs and Efficiency. Although the container and dry bulk shipping markets are not at the direct epicenter of the crisis, the spillover effects on operational costs and the resulting decline in efficiency cannot be overlooked.

Container Shipping Market: Detour Costs and Surcharges: Major global container shipping lines (such as Maersk, Hapag-Lloyd, and CMA CGM) have all suspended vessel transit through the Strait of Hormuz and the Red Sea, opting instead to reroute their vessels around the Cape of Good Hope in Africa. This has resulted in the following:

Increased Voyage Distance and Time Costs:The one-way voyage distance has increased by approximately 3,500 nautical miles, extending transit times by over 10 days and leading to a significant decline in vessel turnover rates.

Soaring War Risk Surcharges (WRS):Major carriers such as Hapag-Lloyd and CMA CGM have announced the imposition of substantial surcharges, adding between $1,500 and $2,000 per 20-foot equivalent unit (TEU).

Dry Bulk and Specialized Vessels: Disruption to Critical Commodities:
Fertilizers and Grains:Between one-quarter and one-third of the global fertilizer trade typically passes through this strait. As the world's fourth-largest exporter of urea, Iran has seen its exports come to a near standstill, causing international urea prices to surge by over 25% within a single week.

Metal Supply Chains:The Middle East accounts for 8% to 9% of global aluminum production. Due to disruptions in both raw material imports and finished product exports, Qatalum has announced a complete suspension of production, while Citibank has raised its three-month aluminum price forecast to $3,600 per ton.

Refrigerated Cargo and Live Livestock: Approximately 100 refrigerated vessels and livestock carriers are currently stranded, placing short-shelf-life cargo at immense risk. Supply Chain Costs: War Risk Insurance, Fuel, and Logistics Restructuring

Surging Insurance Costs and Cancellation Risks:War risk insurance premiums have risen sharply; furthermore, some Protection and Indemnity (P&I) Clubs have begun issuing 72-hour cancellation notices to vessels operating in Persian Gulf waters. This raises the possibility that insurance availability could become an even more critical constraint on transit than the physical blockade itself.

Logistics Network Restructuring and Congestion Displacement:As vessels are unable to discharge cargo normally at Gulf ports, logistical pressure is shifting to transshipment hubs in the Far East and North Africa—such as Singapore and Colombo—where the risk of port congestion is now on the rise.

Short-Term Volatility and Long-Term Restructuring

The pivotal variable in the current market is the duration of the blockade. This factor will not only determine the peak levels of oil prices and shipping rates but will also profoundly shape the future trajectory of global trade patterns.

In the short term, the market is expected to maintain a high-risk premium, with shipping rates, insurance premiums, and commodity prices continuing to experience volatility. In the medium term, should lockdowns persist, the structure of global energy trade and shipping routes will be forced to undergo restructuring, and supply chain security will become the primary consideration in the strategic adjustments of nations and enterprises.