Some shipowners are avoiding the Strait of Hormuz amid escalating conflict between Israel and Iran, according to BIMCO, the world’s largest shipping association. The strategic waterway, crucial for global oil and container trade, has seen a “modest drop” in traffic due to heightened risks.
Israel’s attack on Iran last week intensified regional tensions, prompting caution among vessel operators. While most ships continue transiting the strait, some are diverting, which could raise freight rates and crew wages. The Strait of Hormuz handles about 20% of global oil consumption, and prolonged disruptions could spike energy prices and shipping costs.
Analysts note parallels to Houthi disruptions in the Red Sea, where threats rerouted most container traffic around Africa. Tanker rates to China surged 24% after the Israel-Iran clashes, reflecting market volatility.
Insurance premiums remain stable for now but could rise quickly if hostilities escalate. Hapag-Lloyd, a major shipping firm, called the strait’s threat level “significant” but said operations continue normally—though the situation could change rapidly. The company has avoided the Red Sea since late 2023 due to security risks.