Business / Logistics And Shipping
Impact of Middle East Conflicts on Shipping Markets
The ongoing conflict in the Middle East has created significant uncertainty in the crude and LNG shipping markets, particularly affecting operations in the Strait of Hormuz. With a substantial portion of global oil demand reliant on this chokepoint, any disruptions could lead to severe supply deficits and increased freight rates.
Source material: Drewry Webinar - Impact of ME conflict on LNG, crude and container shipping - April 2026
Summary
The ongoing conflict in the Middle East has created significant uncertainty in the crude and LNG shipping markets, particularly affecting operations in the Strait of Hormuz. With a substantial portion of global oil demand reliant on this chokepoint, any disruptions could lead to severe supply deficits and increased freight rates.
Approximately 20% of global LNG supply is currently trapped in the Strait of Hormuz, significantly impacting the market. Asia, which relies on the Gulf for 80% of its LNG imports, faces potential supply shortages and elevated freight rates due to these disruptions.
Freight rates for Very Large Crude Carriers (VLCCs) have surged due to geopolitical tensions, reflecting a market response to shifting demand. However, a prolonged blockade could lead to a significant decline in freight rates as demand destruction occurs.
The container shipping market is experiencing localized disruptions rather than a global crisis, as the Middle East represents less than 5% of global container throughput. However, rising freight transportation costs due to increased bunker prices are affecting all trade routes.
Perspectives
Analysis of the impact of Middle East conflicts on shipping markets.
Proponents of Increased Shipping Costs
- Highlights the surge in freight rates due to geopolitical tensions and supply disruptions
- Notes that rising oil prices will significantly influence shipping costs and market dynamics
Neutral / Shared
- Identifies that the shipping market is currently oversupplied, leading to a forecasted decline in freight rates for 2026
Metrics
deliveries
15 million barrels units
crude oil passing through the Strait of Hormuz in 2025
This volume represents a critical portion of global oil supply
in 2025 about 15 millions of crude oil translated through the state of hormones
other
14%
global oil demand accounted for by the Strait of Hormuz
This percentage highlights the strategic importance of the Strait for global energy security
which accounted for roughly 14 millions of global oil demand
loss
10%
global oil supply loss due to blockade
A significant loss in oil supply could lead to record-high prices and economic instability
around 10% of oil supply global oil supply will be gone for the one whole complete year
other
4 million barrels per day
expected decline in global oil demand
A sharp decline in demand could severely impact the global oil trade and economic activity
we expect to go down by around 4 million barrels per day which is very high
other
20%
global LNG supply trapped in the Strait of Hormuz
This indicates a significant disruption in global LNG availability
around 20% of global LNG supply has got trapped inside the state of hormones
other
17%
disruption of Qatar's LNG supply
This could lead to lasting effects on global LNG availability and pricing
around 17% of cutters LNG supply has been wiped out for another maybe three five years
other
80%
Asia's LNG imports from the Gulf
High dependency increases vulnerability to supply disruptions
around 80% of LNG supply from this the Gulf moves to Asia
other
20%
global LNG supply potentially unavailable
This significant reduction could lead to severe demand destruction in downstream industries
Around 20 percent of supply will be gone for 12 months.
Key entities
Timeline highlights
00:00–05:00
The ongoing conflict in the Middle East has created significant uncertainty in the crude and LNG shipping markets, particularly affecting operations in the Strait of Hormuz. With a substantial portion of global oil demand reliant on this chokepoint, any disruptions could lead to severe supply deficits and increased freight rates.
- The ongoing conflict in the Middle East, particularly involving Iran, has introduced significant uncertainty in the crude and LNG shipping markets, impacting maritime operations amid high tensions and stalled peace negotiations
- The Strait of Hormuz is a vital chokepoint for oil supply, with around 15 million barrels of crude oil passing through it in 2025, accounting for approximately 14% of global oil demand
- While some oil volumes can bypass the Strait via alternative pipelines, about 10 million barrels remain obstructed, potentially leading to a crude oil supply deficit of 10% of global demand due to ongoing disruptions
- Asian markets are especially at risk, as they import roughly 80% of the oil flows through the Strait, heightening the impact of any prolonged conflict
- Freight rates for Very Large Crude Carriers (VLCCs) have increased significantly, reflecting a market response to geopolitical tensions and a shift in demand towards alternative sources
05:00–10:00
The ongoing conflict in the Middle East is creating uncertainty in the crude and LNG shipping markets, particularly around the Strait of Hormuz. Scenarios range from short-term disruptions to potential blockades lasting up to 12 months, significantly impacting global oil supply and freight rates.
- The ongoing conflict in the Middle East, particularly around the Strait of Hormuz, is creating significant uncertainty in the crude and LNG shipping markets, with scenarios ranging from short-term disruptions to potential blockades lasting up to 12 months
- In the event of a short-term disruption, oil prices are expected to surge due to tight supply, leading to inventory drawdowns and some demand destruction, which would negatively impact overall crude oil trade
- A prolonged blockade lasting a full year could result in a loss of approximately 10% of global oil supply, driving prices to record highs and causing severe demand destruction, potentially forcing freight rates below operational costs for shippers
- Although freight rates may decline during a blockade, a subsequent normalization of traffic through the Strait of Hormuz could trigger a surge in demand for crude tankers, though rates might still remain below pre-conflict levels due to increased supply
10:00–15:00
The ongoing conflict in the Middle East has resulted in approximately 20% of global LNG supply being trapped in the Strait of Hormuz, significantly impacting the market. Asia, which relies on the Gulf for 80% of its LNG imports, faces potential supply shortages and elevated freight rates due to these disruptions.
- Ongoing blockages in the Strait of Hormuz are currently trapping about 20% of global LNG supply, significantly affecting the market
- Asia is highly dependent on the Gulf for LNG, sourcing 80% of its imports, while Europe benefits from increased US supply as a buffer
- Freight rates in the LNG shipping sector spiked following the onset of the conflict, as demand shifted to alternative sources amid limited vessel availability
- Although freight rates have decreased from their peak, current earnings remain over twice the levels seen before the conflict, reflecting persistent market pressures
- In a scenario of short-term disruption, LNG supply shortages are expected to sustain high demand for LNG shipping, but reopening the Strait of Hormuz could lead to a gradual recovery in supply and potential freight rate increases
- A medium-term disruption lasting 3 to 5 years affecting 17% of Qatars LNG supply could have lasting effects on global LNG availability and pricing
15:00–20:00
The ongoing conflict in the Middle East is causing significant disruptions in the LNG and crude shipping markets, particularly affecting the Strait of Hormuz. A prolonged disruption could lead to a severe global supply crunch, with approximately 20% of LNG supply potentially unavailable for up to 12 months.
- A prolonged disruption in LNG supply from the Gulf could result in a severe global supply crunch, with an estimated 20% of LNG supply potentially unavailable for up to 12 months, leading to significant demand destruction in downstream industries
- The expected increase in US LNG exports to Europe and Asia may not fully offset the 17% reduction in supply from Qatar, which is projected to last for the next three to five years
- Freight rates in the LNG market are likely to decline significantly due to weakened demand and increased supply later in the year, potentially dropping below pre-war levels despite a recovery in trade after the Strait of Hormuz reopens
- Even with improved demand and supply normalization, the long-term loss of Qatars LNG capacity will hinder a return to pre-war volume levels, limiting any potential recovery in freight rates
- The container shipping market is facing localized disruptions rather than a global crisis, as the Middle East represents less than 5% of global container throughput, allowing for quick implementation of alternative logistics solutions
20:00–25:00
The ongoing conflict in the Middle East is causing significant disruptions in the LNG and crude shipping markets, particularly affecting the Strait of Hormuz. A prolonged disruption could lead to a severe global supply crunch, with approximately 20% of LNG supply potentially unavailable for up to 12 months.
- Freight transportation costs have surged globally, with bunker prices increasing by 60 to 80% since the conflict began, impacting all trade routes
- Unlike the COVID-19 pandemic, which led to soaring freight rates due to supply constraints, the current crisis is expected to reduce supply without increasing demand, potentially contracting the container shipping market
- Rising oil and bunker costs are likely to drive inflation, diminishing business and consumer spending power, which could impede container volume growth
- In both short and prolonged disruption scenarios, the container shipping market may see only temporary spikes in freight rates, while a prolonged disruption could severely impact the global economy and exacerbate fuel-driven cost inflation
- Geopolitical tensions are expected to rise as major powers explore alternative supply routes and strategic reserves, further complicating the shipping landscape
25:00–30:00
The ongoing conflict in the Middle East is projected to significantly reduce global port throughput growth to between 0.5% and 1.3% for the year. Disruptions in shipping may lead to lasting changes in routes, emphasizing risk management over cost optimization.
- Further escalation in the Middle East conflict could significantly reduce global port throughput growth to between 0.5% and 1.3% for the year, following two years of strong growth exceeding 6%
- Current disruptions in shipping are manageable, but the conflict may lead to lasting changes in shipping routes, shifting focus from cost optimization to risk management and resilience
- The anticipated phased return of Suez transits has been indefinitely delayed due to the conflict, affecting market supply and capacity
- Cargo owners may need to adapt to longer shipping routes, which could increase demand for vessels and influence new shipbuilding and demolition strategies
- In a pessimistic scenario, while the pace of new ship orders may remain high, weakened demand prospects could lead carriers to adopt operational strategies such as slow steaming and vessel idling