Iran-U.S. war chokes key shipping lane and threatens global cargo industry
Sectors like auto manufacturing and consumer electronics could see production slowdowns or shutdowns, according to Abuwasel, who also expects delays for pharmaceuticals, medical supplies and temperature-controlled products the longer the conflict drags on.
Historically, geopolitical shocks tend to fade quickly in terms of economic impact. Last summer’s tension between the United States and Iran, for example, caused crude prices to briefly rise to around $80 a barrel before quickly stabilizing. The Strait of Hormuz has avoided massive disruption, despite initial fears.
This time, analysts say, it’s different.
“The scale [of Iran’s retaliation] was a big, big surprise,” Jorge León, head of geopolitical analysis at research firm Rystad Energy, told NBC News on Saturday in the wake of the U.S.-Israeli attacks.
Last year, Iran’s retaliatory strikes were “limited” and “very telegraphed,” he said. This time, the scope and intensity were broader, adding: “It’s a totally different world than what the market expected.”
As well as disrupting trade, it is also expected to make shipping more expensive, with insurers canceling policies and increasing the price of cover. In the event of termination, insurers offer coverage at new renegotiated rates and do not refuse coverage, according to brokers.
Last weekend, insurance broker Marsh predicted that insurance prices could rise by up to 50% in the coming days. With tensions rising and at least one tanker already damaged, Marcus Baker, head of marine, cargo and logistics at Marsh Global, said he expects the cost of insurance could increase by as much as 100%.
“You have, you know, 25 crew members on one of these ships all making a decision to go into an area where they might be bombed tomorrow. And I think that’s a fundamental thing that many shipowners are now considering more than they might have 20 or 30 years ago,” Baker said.
A crew member was killed on Monday after an oil tanker was targeted by an unmanned boat in the Gulf of Oman, the Oman Maritime Safety Center said in a statement on X. It said the crew of 21 had to be evacuated due to flames, but one crew member was killed by an explosion in the engine room.
In addition to the danger posed to crews, the tankers are stuck and damaged, Reuters reported. Ken Fichtelman, head of U.S. maritime and cargo for insurance broker McGill and Partners, said he expects insurance prices could more than double — and not just in the Persian Gulf.
