Israel-Iran, with the risk of war affecting 3.4% of container volumes

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Tensions in the Middle East remain high after Iranian missiles struck the Soroka Hospital in Be’er Sheva, southern Israel, injuring 65 people, while Israel retaliated by targeting Iran’s Arak nuclear reactor.

However, container shipping traffic in the Middle East does not appear to have been significantly affected by the escalating geopolitical tensions in the region. Many shipping companies have maintained their scheduled services and port calls in the Gulf and Israel but acknowledged the highly volatile situation, leaving open the possibility of adjustments to their network operations.

In a customer advisory, ZIM, for example, stated its intention to continue accepting bookings for shipments to and from Israel. “Currently, despite the ongoing conflict, all local ports—Ashdod, Haifa, and Eilat—are operating normally,” the shipping company confirmed.

Given the circumstances, the liner noted that insurance providers have imposed an additional war risk premium on all vessels calling at Israeli ports. According to Reuters, war risk insurance premiums for ships docking in Israel have risen to as much as 1% of the vessel’s value, up from 0.2% a week ago.

Consequently, ZIM announced it would pass these additional costs to end customers through a war risk premium surcharge ranging from €50 to €120, depending on the selected service.

In response to the evolving geopolitical situation, CMA CGM also stated in a notice that it is closely monitoring the conflict’s developments, prioritizing the safety of crews on vessels transiting the Red Sea.

Other carriers have opted to avoid the Red Sea altogether, favoring the longer but safer route around the Cape of Good Hope, which has become the preferred trade lane for East-West commerce following Houthi attacks on merchant ships.

What is certain is that after Israel’s June 13 strikes—part of Operation Rising Lion, aimed at disrupting Iran’s nuclear program and targeting Tehran’s military leadership—the conflict has escalated into a conventional war between two non-neighboring states.

If the crisis intensifies to the point of closing the Strait of Hormuz, the repercussions could extend beyond the oil market (read our interview with Enio Palmesino here) to the container shipping sector.

According to Linerlytica, a potential closure of the strait separating the Persian Gulf from the Gulf of Oman could jeopardize up to 3.4% of global container volumes.

The United Arab Emirates would be the hardest hit in such a scenario: its ports handle 21.7 million TEUs annually, accounting for 2.2% of global container volume and 65% of the region’s total. Jebel Ali Port, operated by DP World, serves 132 liner services, 30 of which are intra-regional, while the rest rely on Hormuz.

“However, the risk of a Hormuz blockade remains low, as Iranian ports heavily depend on Gulf access for handling their 2.5 million TEUs annually,” Linerlytica noted.

It is no coincidence that the Strait has so far been spared direct consequences of the Israel-Iran war, with the exception of disruptions to naval traffic. According to Windward, nearly 1,000 ships in the Gulf have been affected by interference.

Jamming—disrupting Automatic Identification System (AIS) signals—has become increasingly common in conflict zones. This tactic effectively blocks satellite signals, displaying false vessel positions on maps and significantly increasing the risk of maritime accidents.

The latest incident involved a collision between tankers south of the Strait of Hormuz. The *Front Eagle*, en route to Zhoushan Port in China at 12.1 knots, made a sudden turn to starboard, colliding with the port stern of the *Adalynn*, which was heading southeast toward the Suez Canal.

The unusual maneuver raised suspicions among experts that both vessels may have suffered electronic interference, distorting their positions.

The Joint Maritime Information Centre (JMIC), part of the U.S.-led Combined Maritime Forces, classified the *Front Eagle* and *Adalynn* collision as navigation-related and unrelated to the Iran-Israel conflict.