Global Shipping On High Alert After US Airstrikes On Iran’s Nuclear Facilities

The global shipping industry is on high alert as threats continue to escalate around the Arabian Peninsula after U.S. airstrikes on Iran’s nuclear facilities.

Security experts and international shipowner organisations warn that the risk to commercial vessels in the region has increased sharply, especially in the Strait of Hormuz, the Red Sea, and the Gulf of Aden.

BIMCO, one of the world’s largest direct-membership shipping organisations, has reported that it is unclear how Iran will respond to the U.S. attack, but the overall threat level in nearby waters has risen.

The group’s head of security, Jakob Larsen, stated that the Houthis in Yemen have also increased their threats against merchant vessels, especially those linked to Israel or the U.S.

Larsen added that Iranian forces are likely to prefer targeting U.S. Navy ships or commercial vessels associated with the U.S. and Israel. He warned that Iran could try to disrupt shipping in the Strait of Hormuz through attacks using drones or anti-ship missiles, and although less likely, the laying of sea mines could also be a possibility.

The Strait of Hormuz is a vital waterway that links the Persian Gulf with the Arabian Sea. According to the U.S. Energy Information Administration, an average of 20.9 million barrels of oil passed through the strait daily in 2023, accounting for about 20% of global petroleum liquids consumption. Any blockages or delays in this corridor could cause oil prices to spike, delay cargo delivery, and increase shipping costs globally.

Larsen stated that U.S. Navy warships may not be available to protect all merchant ships due to growing threats to military bases in the region. He advised commercial vessels, especially those without U.S. or Israeli links, to be cautious.

Ports like Jebel Ali and Khor Fakkan handle less than 4% of global container trade but play an impoto regional shipping. Most cargo passing through these ports is headed to Dubai, a hub for goods moving between the Persian Gulf, South Asia, and East Africa.

The impact of the conflict has already affected trade routes. Earlier, Maersk, a global logistics provider, announced it was suspending port calls to Israel’s biggest container port in Haifa. The port, worth $4.2 billion and operated by India’s Adani Group, was previously targeted by Iranian missiles but did not suffer any damage. The company’s CFO, Jugeshinder “Robbie” Singh, dismissed false claims circulating on Iranian social media that the port had caught fire.

Meanwhile, a spokesperson from shipping company Hapag-Lloyd said that their ships were still crossing the Strait of Hormuz but were operating under high alert and monitoring the situation closely.

Freight rates are rising as the situation worsens. Xeneta, a shipping market analytics firm, reported that average spot rates from Shanghai to Jebel Ali have gone up by 55% month-over-month, reaching $2,761 per forty-foot equivalent unit (FEU).

Tanker rates have surged even more. Very large crude carrier (VLCC) rates from the Middle East to China rose 154% in just one week, while rates for long-range tankers (LR2) on the Middle East-Japan route increased by 148%. Rates for very large gas carriers (VLGCs) on the same route rose by 33%.

Marine insurance premiums are also rising. Marsh McLennan, the world’s biggest marine insurance broker, said that hull and machinery coverage for ships transiting the Strait of Hormuz has increased by over 60%.

BIMCO has urged all shipowners to update their security risk assessments. Larsen advised ships in the region to minimise risks by sailing away from the Iranian coast, staying in close contact with naval forces through UK Maritime Trade Operations (UKMTO), and maintaining high vigilance. He recommended that crews report any suspicious activity, ensure ships are watertight, and keep firefighting and damage control systems ready.

He added that BIMCO does not directly advise shipowners to avoid conflict zones completely. Instead, each shipowner must decide after evaluating the threat level, vessel vulnerability, and risk tolerance of crew, cargo owners, and the company itself.

On Sunday, the Greek government issued a strong warning to its shipowners, the country controls the world’s largest oil tanker fleet. Greek government spokesman Pavlos Marinakis said that Greek-flagged and Greek-owned vessels in the area should remain in safe ports until the situation becomes more stable.

Some Greek shipping companies are still reviewing the situation, with one operator saying they may allow ships to enter the region, while another said they would likely stay away.

Naval forces operating in the region have also increased their threat levels. The Joint Maritime Information Center (JMIC) warned that U.S.-linked ships face high risk while transiting the Red Sea and Gulf of Aden. The update came after Yemen’s Houthi rebels issued new threats targeting American military and commercial ships.

Previously, a ceasefire between the U.S. and the Houthis had reduced such attacks, but the recent airstrikes have raised tensions again. JMIC recommended that ships linked to the U.S. consider re-routing.

References: cnbc, NDTV

Source: Maritime Shipping News