Iran conflict threatens key shipping routes in the Middle East; shippers halt operations, re-route vessels and introduce surcharges

On the morning of February 28, 2026, the geopolitical makeup of the global automotive industry shifted with unusual violence. Coordinated US and Israeli strikes on Iran, culminating in the reported death of Iran's supreme leader ayatollah Ali Khamenei and senior security officials, triggered a chain reaction in the world's most critical maritime corridor.

Within hours, Iran's Islamic Revolutionary Guard Corps was broadcasting warnings to vessels in the Strait of Hormuz that passage was "not allowed." By late Saturday evening, vessel traffic through the strait had fallen by approximately 70%.

According to a 2025 report from UN Trade and Development (UNCTAD), the Strait of Hormuz facilitates 11% of global maritime trade volume, while over 30 million TEUs of containerised port traffic takes place in the vicinity.

Impact on global shipping companies

The far-reaching consequences of the conflict for global shipping were immediately evident. Operational updates were issued quickly by all five of the biggest shipping companies by market share (according to Alphaliner data): MSC, Maersk, CMA CGM, COSCO Shipping and Hapag-Lloyd. 

MSC instructed all vessels currently operating in, and en-route to, the Gulf region to "proceed to designated safe shelter areas until further notice", later announcing it had suspended all bookings for worldwide cargo to the Middle East region until further notice.

Jebel Ali Port disruption

According to a notice seen by Reuters, DP World confirmed on March 2 that operations at Jebel Ali Port have resumed after a "precautionary suspension" of activities following a fire at one of the berths caused by "debris resulting from an aerial interception".

Maersk reported possible service disruptions in the Middle East and noted that its warehousing facilities in the UAE would be closed on March 2 as a precautionary measure, following the government shelter guidance. It said it would pause future Trans-Suez sailings through the Bab el-Mandeb Strait for the time being, re-routing all sailings on the Middle East-India to Mediterranean (ME11) and Middle East-India to East Coast US (MECL) around the Cape of Good Hope.

Then in a second update on March 2, Maersk suspended reefer and dangerous/special cargo acceptance in and out of the UAE, Oman, Iraq, Kuwait, Qatar, Bahrain and Saudi Arabia, effective immediately, while also suspending all new bookings between the India Subcontinent (India, Pakistan, Bangladesh and Sri Lanka) and the Upper Gulf markets of the UAE, Bahrain, Qatar, Iraq, Kuwait, and Saudi Arabia (Dammam and Jubail only).

CMA CGM instructed all vessels in or coming into the Gulf region to proceed to shelter, and suspended passage through the Suez Canal – with vessels re-routed via the Cape of Good Hope. It then made the decision to stop all reefer bookings with immediate effect between the following countries: Iraq, Bahrain, Kuwait, Yemen, Qatar, Oman, United Arab Emirates, Kingdom of Saudi Arabia, Jordan, Egypt (Port of Ain Sokhna), Djibouti, Sudan and Eritrea.

The most recent update from CMA CGM outlined its decision to stop all dangerous/hazardous goods bookings between the aforementioned countries with immediate effect from March 2.

COSCO Shipping has issued just one customer advisory statement (at time of writing), which came on March 1. In this update, it outlined that, like others, it had instructed vessels in the Gulf and incoming vessels to proceed to safe waters. It said it was evaluating contingency plans for all cargo onboard the affected vessels and promised to provide further updates as it continued to monitor the further developments.

Hapag-Lloyd paused future trans-Suez sailings through the Bab el-Mandeb Strait on March 1. It warned customers of operational disruption to shipments to and from the UAE, Saudi Arabia, Kuwait, Qatar, Bahrain, Iraq and Oman. It introduced booking restrictions for reefer cargo and intra-Middle East trades.

On March 2, it implemented a booking stop with immediate effect for all cargo types from Africa to the Upper Gulf region, including the UAE, Iraq, Kuwait, Qatar and the Eastern Province of Saudi Arabia. Additionally, all cargo moving via Jebel Ali was included in this booking stop.

Both CMA CGM and Hapag-Lloyd have introduced temporary surcharges for some bookings as a result of the conflict. As of March 2, there has been no official communication surrounding surcharges from MSC, Maersk or COSCO Shipping. See Figure 1 for more information on CMA CGM's Emergency Conflict Surcharge (ECS) and Hapag-Lloyd's War Risk Surcharge.

Costs associated with re-routing around Africa

The alternative to the now-disrupted Suez and Hormuz routes is the Cape of Good Hope, and the arithmetic is not favourable for precision manufacturing. Re-routing via the cape adds approximately 10 to 14 days to transit times for vessels travelling between Asia and Europe or the Americas. This is not a theoretical inconvenience; it is an operational transformation. Buffer inventories, already thinned by years of lean manufacturing philosophy and post-pandemic supply chain reform, are not sized for a fortnight of additional transit time in either direction. Assembly plants in Germany, the UK, the US and Mexico will begin to feel the effects of delayed Asian component shipments within two to three weeks of any sustained closure.

Fuel consumption for vessels rerouting around Africa increases significantly, adding to both carrier costs and the broader carbon footprint of global automotive logistics. At a moment when OEMs are under increasing regulatory pressure to report and reduce their Scope 3 supply chain emissions, the grim irony is that a geopolitical crisis is forcing the industry to burn more fuel in order to avoid a different crisis altogether.

Energy costs a key concern for automotive

The Strait of Hormuz handles approximately 20% of the world's daily oil supply and, crucially, 22% of global liquefied natural gas (LNG) exports, almost all of which originate in Qatar. Around 20 million barrels of crude oil and petroleum products transit the waterway each day, serving Saudi Arabia, Iraq, Kuwait, the UAE and Iran itself. The corridor's narrowness, at its tightest point a mere 33km wide, is what makes it strategically decisive and operationally fragile.

On March 2, brent crude – the global benchmark for oil prices – jumped by 10% to more than $82 per barrel, while natural gas prices spiked by nearly 50% after QatarEnergy, one of the world's biggest exporters, halted production following attacks on its facilities.

"A prolonged closure of the Strait of Hormuz is a guaranteed global recession," warned Robert McNally, an energy analyst at Rapidan Energy Group, a view widely cited in market commentary as the crisis unfolded.

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For automotive manufacturers, the transmission mechanism is not complicated, but the consequences are wide. Energy costs account for a significant proportion of total production expenses in vehicle assembly. Steel foundries and aluminium smelters, whose output feeds every stamping line on the planet, are among the most energy-intensive industrial facilities in existence.

Paint shops, body presses and powertrain machining all consume electricity at scale. On top of that, automotive logistics operations are themselves energy-intensive. When the marginal cost of energy rises sharply, the pain distributes itself throughout the supply chain within weeks, not months.

“At a time when the automotive industry is struggling with a seeming permacrisis, including a $60 billion EV reset, the US-Iran war will not only have severe supply chain impacts, but also serious economic ramifications," Daniel Harrison, senior automotive analyst at Automotive Logistics observed. "These include severe supply chain disruptions and serious economic effects: higher energy and logistics costs, lower sales and production volumes, and reduced profit margins, as well as inflationary pressures that could drive up interest rates and capital borrowing costs, further delaying investments that were already postponed.”