Global Shipping Disrupted as Iran Conflict Hits Tankers in Gulf

Global shipping just slammed on the brakes.

As the Iran conflict widens, at least four tankers have been damaged, two seafarers killed, and around 150 vessels are now stranded near the Strait of Hormuz — one of the world’s most critical oil routes.

Strait of Hormuz Traffic Near Standstill

The Strait of Hormuz — the narrow waterway between Iran and Oman that carries about 20% of the world’s oil — has seen traffic grind to a near halt.

Iran said it has closed navigation through the area following retaliatory strikes linked to US and Israeli attacks. Ship-tracking data shows tankers clustering in open waters near major Gulf producers like Saudi Arabia, Iraq and Qatar, waiting it out.

Tankers Hit, Lives Lost

Several vessels have been caught in the crossfire.

The US-flagged tanker Stena Imperative was damaged by aerial impacts while docked in the Gulf. A shipyard worker was killed in the incident.

Another strike hit the Marshall Islands-flagged MKD VYOM off Oman’s coast, killing a crew member. Two more tankers were also damaged.

The Gibraltar-flagged Hercules Star was struck off the UAE coast but later returned safely to anchorage in Dubai. All crew members on board were reported safe.

Insurers Pull War Risk Coverage

Now the financial ripple effect is kicking in.

Major marine insurers, including Gard, Skuld and NorthStandard, have announced they are cancelling war risk coverage in Iranian waters, the Gulf and nearby areas starting March 5.

Without war risk insurance, many shipowners are unlikely to send vessels into the region — which means fewer ships and higher costs.

Japan’s MS&AD Insurance Group has also suspended underwriting war-related policies in waters around Iran, Israel and neighboring countries.

Oil Prices and Shipping Costs Climb

With shipping disrupted and energy infrastructure under pressure, oil and gas markets are reacting fast.

Brent crude futures have jumped more than 8%, while European natural gas prices are also rising. Shipping oil from the Middle East to Asia — already at six-year highs — is expected to become even more expensive as shipowners rethink routes.

The bottom line? When the Strait of Hormuz stalls, the global economy feels it — from fuel prices to supply chains.

This article was previously published on bahrainmoments. To see the original article, click here