With the US-Iran deal to reopen the Strait of Hormuz imminent, container shipping will be facing a minimum of three months before full recovery. A memorandum of understanding to extend the ceasefire between the US and Iran has been signed. Iran has committed to allow safe passage through the Strait of Hormuz, provided vessels get approval from the Islamic Revolutionary Guard Corps.
The Strait of Hormuz is a narrow, strategically important waterway connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. This important waterway accounted for transits of up to 10% of the global container fleet.
The scale of the disruption caused by the closure of the Strait of Hormuz since the beginning of the Middle East conflict in February means that full recovery of supply chains is projected for September 2026.
The blockade of the Strait of Hormuz impacted about 10% of global container shipping capacity and led to spiraling freight rates. The disruption and volatility cannot be reversed overnight. The ripple effects of the blockade are evident in record-high spot rates and high jet fuel prices that affected airfreight.
Even if a complete return is successful, normal activity at the Strait of Hormuz will not return to pre-Middle East crisis levels. The geopolitical situation is projected to remain fragile for the foreseeable future. Carriers and shippers will implement measures to avoid disruptions due to the closure of the Strait of Hormuz. Transshipment services within the region may increase transit times but insulate the long-haul network from future disruption.
