Three days in, and the region’s logistics channels are already under strain in the wake of the US-Israeli attack on Iran. While it is still too early to assess true economic impact, traffic through the Strait of Hormuz is thinning, ports are tightening security, and airlines are rerouting and suspending flights.

What to watch: Chokepoints under stress

Maritime traffic is grinding to a halt. Oil tanker movements through Hormuz have been halted, with roughly 240 vessels stopping near the chokepoint — most around Iran’s Bandar Abbas port. Around 130 of those ships were carrying cargo, but none loaded with crude. At present, total AIS traffic, not including dark transits, is down some 80% through the strait, according to data from maritime risk analyst firm EOS Marine.

Three ships were struck yesterday, including one hit by an unidentified projectile northwest of the UAE’s Mina Saqr in Ras Al Khaimah. A second strike reportedly hit a vessel near Sharjah, though its crew was all found to be safe, CNBC Arabia reports. Another incident took place near Oman as a small tanker, Skylight, which appears to be under US sanctions, was hit off its northern coast, with one crew member killed.

Containerships are also caught in the bottleneck, with around 170 containerships carrying a combined capacity of 450k TEUs — some 1.4% of the global maritime fleet — currently inside the strait, Linerlytica co-founder Hua Joo Tan said. At least 15 containerships either entering or exiting Hormuz have reversed course.

A full Hormuz closure would be very painful. Hormuz is the primary export route for crude and condensate pumped by Saudi Arabia and its neighbors, with tankers carrying 16.5 mn barrels per day (bbl / d) through the strait in 2024. The strait handles roughly 80% of the kingdom’s oil exports. Saudi Arabia has one key bypass: the 1.2k km East-West pipeline that stretches from Abqaiq near the Arabian Gulf to a Red Sea terminal at Yanbu, which has a capacity of up to 5 mn bbl / day, expandable by an additional 2 mn bbl / day on short notice.

Pundits think the strait won’t be closed off for long: “If the Strait of Hormuz were to close, the most likely scenario is that it would be temporary, potentially lasting one to two weeks,” Rystad Energy’s Jorge Leon tells EnterpriseAM, adding that a prolonged closure would carry severe geopolitical consequences and likely provoke a rapid international response. “That said, even a short-lived disruption would create a significant logistical backlog.”

Risk perceptions are also rising further south: Shipping lines could be spooked further if the Houthis follow through on their threat to “resume missile and drone attacks, making the Red Sea a standing variable in Tehran’s escalation toolkit,” former head of supply chain and transport industries at the World Economic Forum Wolfgang Lehmacher tells EnterpriseAM.

Any Houthi strikes would resonate beyond the Bab al Mandeb strait, shaping perceptions of risk from Suez to Hormuz and forcing carriers to recalibrate already thin buffers in global container and tanker fleets, Lehmacher said.

Most major shipping lines are already steering clear of the Suez Canal — in the weeks leading up to the conflict, most had been simply testing the waters, Port Said Chamber of Shipping head Adel Lamai tells EnterpriseAM. This included Maersk rerouting its ME11 and MECL services around the Cape of Good Hope, the maritime giant said in a statement Friday. French shipping outfit CMA CGM, MSC, and Germany's Hapag-Lloyd are doing the same until further notice.

For Egypt, hopes of luring traffic back to the canal will be pushed back, with shipping lines often looking for one to three months of stable and safe conditions following the end of any hostilities before sending back their larger vessels, a senior government official tells us. Despite progress being made in bringing back vessels through the canal in recent months, the canal’s target of bringing in USD 8-9.2 bn is now solidly out of reach.

What to watch: Energy flows and industrial supply risk

About 20% of global oil supply — some 21 mn barrels a day —alongside 20%of global LNG exports, passes through Hormuz. The chokepoint carries crude from Saudi Arabia, the UAE, Iraq, Kuwait, and Iran, as well as large volumes of Qatari LNG. Asian buyers — which source roughly a quarter of their LNG from Qatar, and are the largest importers of Gulf crude — are calling suppliers to line up alternatives. “The rational response is not to abandon Hormuz, but to accelerate route diversification and pipeline development,” Lehmacher told us.

Keep the gas flowing: To ensure supply keeps up with demand, Egypt’s Oil Ministry is moving to increase LNG bookings by an additional 20 shipments for some USD 1-1.5 bn, starting with 15 shipments this month, after Israel shut off 1.1 bcf/d of Egypt-bound gas, a government official tells EnterpriseAM.

Turkey is another pressure point in the mix: Ankara imports pipeline gas from Iran under a 9.6 bcm per year contract — though actual volumes recently fell below that level. If flows are curtailed further as the conflict escalates, Turkey — like Egypt — may have to step up LNG purchases, adding demand into an already tightening seaborne market, and putting more pressure on the super-chilled gas price.

What to watch: Port operations and suspensions

Services calling at GCC ports are expecting to face delays, reroutings, or schedule adjustments. “Carriers will instead omit these calls on east-west services and drop boxes at a least-worst alternative port for onward transportation by road,” freight intelligence platform Xeneta chief analyst Peter Sand explained.

Operational disruptions followed for UAE trade hubs, including DP World suspending all operations at Jebel Ali Port as a precautionary measure, halting all activities across the port’s terminals, Bloomberg reports.

Kuwait’s Ports Authority also suspended operations at Shuaiba, and Bahrain halted operations at Khalifa Bin Salman Port and limited activity at Sitrah Port to emergency movements only. Qatar’s Transport Ministry temporarily paused all maritime navigation.

What to watch: Risk premium and energy market repricing

War risk insurers have issued cancellation notices for ships transiting via Hormuz, with brokers telling the Financial Times that coverage will be renegotiated at higher rates than withdrawn outright — and prices could jump as much as 50%. Premiums had been running at about 0.25% of a vessel’s replacement value, meaning a USD 100 mn ship paid roughly USD 250k per voyage; that could now rise to USD 375k. Cargo war risk cover for oil and grain is also set to be reset this week.

“The cost of [covering] ships, containers, and crews, in addition to the refusal of some international ins. companies to [cover] war risks, will put pressure on global trade in the coming period,” former Suez Canal Authority chairman and Suez Chamber of Shipping head Abdel Qader Gaballah told EnterpriseAM. “Furthermore, exchange rate fluctuations and rising oil prices will all contribute to a significant wave of inflation,” he added.

What to watch: Airspace fragmentation and cargo network disruption

Widespread airspace closures and flight disruptions have spread through the region. Iran, Israel, Iraq, Qatar, Bahrain, and Kuwait completely shut their skies to commercial traffic, while the UAE, Syria, and Oman have severely restricted flights. Saudi Arabia is hosting GCC nationals stranded in its airports until conditions are suitable for safe repatriation.

The aviation industry could take a hit: “Any long-term disruption that continues to see the airspace from Kuwait to the UAE closed will have enormous repercussions for the industry. Nearly 100 mn people passed through Dubai alone last year, not to mention the massive cargo operation. Any extended conflict has the potential to upend a large part of the aviation industry,” Ian Petchenik, director of Communications at Flightradar24, tells EnterpriseAM.

Incidents at key airports:

• Dubai International Airport (DXB): Minor terminal damage caused by an incident overnight prompted evacuation and emergency response;
• Abu Dhabi’s Zayed International Airport: A drone attack resulted in one death and seven injuries;
• Kuwait International Airport Terminal 1: A drone strike caused minor injuries and limited material damage, but the resumption of operations is underway.

What’s next?

Repeated stress on the Suez Canal and Hormuz could catalyze a new MENA-doctrine-proof corridor mix, Lehmacher tells us. “We are likely to see faster development of African, Atlantic, and Indian Ocean gateways, greater use of alternative Eurasian and intra-regional routes, and selective upgrading of Gulf and Eastern Mediterranean ports as contingency hubs for rerouting cargo and services when doctrines or security conditions change,” he adds. Ins., finance, and development capital will follow, with more granular, corridor-specific pricing that rewards better security and governance in other routes.

The outlook is more cautious for sectors with direct exposure to the conflict. “Egypt’s Red Sea resorts and airlines face direct demand destruction as regional airspace closures and travel risk aversion take hold,” Randa Hamed, managing director of Okaz Asset Management, tells EnterpriseAM. Import-dependent industries face an acute supply chain shock as freight costs surge, while “real estate construction projects with Gulf financing exposure could face some funding uncertainty” as the regional situation remains fluid.