Posted on:
Impact of Middle East Unrest on Transport Costs
Since Israel’s attack, not only have oil and diesel prices risen, which is noticeable in both pre- and post-transport, but shipping companies are also charging risk surcharges. If the Strait of Hormuz closes, prices are likely to surge even further.
Due to the conflicts in the Middle East, fuel prices have already increased by several cents per liter. This is not surprising given that this region accounts for one-third of the world’s oil production. Now that Iran’s parliament has approved closing the Strait of Hormuz, this could have major consequences for logistics.
The Strait of Hormuz is a vital transit route for oil and gas trade. Closing it would not only affect international tanker shipping but also container shipping. Analysts warn that 3.4% of global container capacity could come to a halt. For companies, this means they need to reassess their supply chains, map out alternative routes and ports, and reevaluate inventories. Not only oil prices but also the availability of goods and containers would come under significant pressure.
The above factors, combined with the surcharges that shipping companies charge for the risks they take and the rising fuel prices, are driving transport costs up. What is happening in the Gulf region could thus trigger a global crisis.
Our colleagues are ready to support you find the best routes and alternatives. We recommend booking transport early to avoid extra costs and delays as much as possible.
:quality(80))
:quality(80))
:quality(80))
:quality(80))
:quality(80))
:quality(80))
:quality(80))