New York: The ongoing Iran war has not only halted oil tanker traffic through the critical Strait of Hormuz but is also severely disrupting global supply chains, affecting the movement of essential goods ranging from pharmaceuticals and semiconductors to fertilisers and petrochemicals.
Cargo vessels remain stranded inside the Gulf or are being forced to reroute around the southern tip of Africa, significantly extending transit times. Air cargo operations across the Middle East have also been constrained due to closed airspace and airport shutdowns. Experts warn that prolonged disruption could trigger shortages and sharp price increases across multiple sectors.
“This is really causing some major impacts within the global supply chain,” said Patrick Penfield, professor of supply chain practice at Syracuse University. “As this conflict keeps progressing, you'll start to see some shortages and major price increases.”
Clarksons Research estimates that approximately 3,200 ships — around 4 per cent of global shipping tonnage — are currently idle inside the Persian Gulf. Of these, about 1,231 vessels typically operate only within the Gulf. An additional 500 ships, representing about 1 per cent of global tonnage, are waiting outside the Gulf at ports along the coasts of the United Arab Emirates and Oman.
Penfield compared the supply chain to a long train, where disruption in one segment can create a domino effect across global trade routes. Even if only a limited number of ports are directly affected, the ripple effects can be substantial.
On Tuesday, US President Donald Trump proposed measures aimed at restoring oil and trade flows through the Strait. He said on social media that he had directed the US International Development Finance Corporation to provide political risk insurance at a “very reasonable price” for tankers transporting oil and other goods through the Persian Gulf. Political risk insurance protects companies against financial losses caused by unstable political conditions, government actions or violence. Marine insurers have recently cancelled coverage or sharply raised premiums in the region.
Trump also stated that, if necessary, the US Navy would escort oil tankers through the Strait of Hormuz.
Beyond oil — roughly 20 per cent of global supply passes through the region — the Middle East is a major supplier of natural gas-based products, including petrochemical feedstock used to manufacture plastics and rubber, as well as nitrogen fertilisers. Pharmaceuticals exported from India and semiconductors and batteries shipped from Asia to global markets also transit through the region and now face potential delays.
Instability has further dampened traffic in the Red Sea and the Suez Canal, which had only recently begun to see increased transit after years of disruption linked to Houthi attacks on vessels.
Air freight has also come under significant strain. Airspace and airport closures in the United Arab Emirates, Qatar, Bahrain, Kuwait, Iraq and Iran have stranded tens of thousands of passengers and shipments.
Major regional carriers — Emirates, Qatar Airways and Etihad Airways — operate dedicated cargo fleets and also transport freight in the belly holds of passenger aircraft. The shutdown has sharply reduced available capacity.
Although less than 1 per cent of global freight moves by air, such shipments typically consist of high-value or perishable goods, including pharmaceuticals, electronics and fresh produce. These products account for roughly 35 per cent of global trade value, according to Boeing’s World Air Cargo Forecast.
The longer Middle Eastern aviation hubs remain closed, analysts warn, the greater the economic fallout from delayed or rerouted sensitive shipments. Flights through these hubs are particularly vital for passenger and cargo traffic to and from India. Henry Harteveldt, an airline industry analyst with Atmosphere Research Group, said it has become increasingly difficult to reach India under current conditions.
Air freight costs are expected to rise as reduced capacity meets heightened demand, compounded by surcharges. Shipping giant Maersk said in an operational update that air freight rates are likely to increase due to capacity constraints.
Despite the upheaval, industry leaders say the global logistics sector has grown more resilient after navigating recent crises, including pandemic-related supply shortages and earlier Middle East conflicts. Michael Goldman, general manager of North America at CARU Containers, described the situation as “pretty unprecedented” but noted that disruption has become a constant feature of the industry in recent years.
“For the last few years, the industry just kind of runs on disruption,” he said. “In terms of our industry having disruption, that is nothing new. That’s more of the same.”
(With PTI inputs)