Strait of Hormuz Closure: Shipping Industry Braces for Impact

Following U.S. and Israeli actions against Iran, container ships are among 750 vessels delayed in the Strait of Hormuz. Maritime insurers have stopped covering routes through the strait, escalating disruptions in shipping and causing potential oil price surges. Industry carriers, including Ocean Network Express, have halted bookings to the Middle East.

Container ships make up a significant portion of the 750 vessels caught in the Strait of Hormuz logjam, following military actions between the U.S., Israel, and Iran. Jeremy Nixon, CEO of Ocean Network Express, emphasized that about 10% of the global container fleet is affected, at S&P Global Market Intelligence's TPM26 conference.

With marine insurers stopping coverage for voyages through the strait, which is crucial for oil and gas transportation, the risk of a global shipping bottleneck intensifies as Iran threatens retaliation. Cargo pile-ups are expected in major European and Asian ports, according to Nixon.

Major shipping companies, including ONE and MSC, have ceased bookings to the Middle East amid these tensions. Experts warn that a prolonged disruption could lead to soaring oil prices, potentially causing a spike in energy costs globally.

(With inputs from agencies.)