Sam Meredith of CNBC News reports that some shipowners are beginning to avoid the Strait of Hormuz due to rising tensions stemming from the ongoing Israel-Iran conflict, according to the global shipping association Bimco. The strategic waterway, crucial for global oil and container trade, has seen a “modest drop” in ship traffic as security concerns mount. Freight rates surged following Israel’s recent strikes on Iran, and while shipping insurance premiums remain stable for now, experts warn they could rise quickly if the situation escalates. The growing threat mirrors earlier disruptions in the Red Sea, highlighting the vulnerability of key global trade routes to geopolitical conflict. Meredith writes:
Some shipowners are opting to steer clear of the strategically important Strait of Hormuz, according to the world’s largest shipping association, reflecting a growing sense of industry unease as the Israel-Iran conflict rages on. […]
In 2023, oil flows through the waterway averaged 20.9 million barrels per day, according to the U.S. Energy Information Administration, accounting for about 20% of global petroleum liquids consumption. […]
Freight rates jumped after the Israeli attacks on Iran last week. Indeed, data published Monday from analytics firm Kpler showed Mideast Gulf tanker freight rates to China surged 24% on Friday to $1.67 per barrel. […]
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