Shipping disruptions persist as the Israel-Hamas conflict enters its fourth day: Ashkelon Port, Israel’s largest oil terminal, located 10 km north of the Gaza Strip, has been closed by the Israel Defense Forces and international shipping has been warned to exercise “extreme caution” while transiting the area, Splash 247 reports. Israel’s energy ministry has also instructed Chevron to shut down the Tamar natural gas field off the northern coast. Haifa Port and Ashdod Port remain operational.

Analysts weigh in: “While the immediate effects on shipping and commodities are likely to be limited, diplomatic and other developments in the broader region could have longer-term consequences that could affect seaborne trade,” chartering platform Shipfix said, according to Splash 247. Fearnleys analysts believe that the war is unlikely to have a direct impact on shipping markets, but pointed to some potential indirect effects, such as decreasing the likelihood of sanctions on Iran being lifted. Ole-Rikard Hammer from Arctic Securities forecasts that VLCC will be most affected by the conflict given the seasonal uptick in demand and tight tanker market.

Shipping bunkering costs are also likely to get caught in the dragnet: Analysts are cautioning that an escalation in the Israel-Hamas conflict could lead to a further increase in oil prices, affecting shipping bunker costs, Seatrade Maritime reports. Bunker prices at major ports rose recently, ending a trend of declining prices, according to figures from Ship & Bunker. This price hike comes after a week of sharp declines in oil prices due to concerns about inflation and weakened demand. It also comes as reports are circulating that Saudi Arabia, the world’s largest oil producer, may increase production by 1 mn barrels per day (bbl / d) from its current 9 mn bbl / d.

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