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CNBC
7 hours ago
- Business
- CNBC
Threat to commercial shipping around Arabian Peninsula is rising, largest global shipowners organization warns
The world's largest direct-membership organization for shipowners, charterers, shipbrokers, and agents is warning that while it is still unclear how Iran will respond to Saturday's U.S. attack on Iran's nuclear facilities, the threat to commercial shipping in the waters around the Arabian Peninsula has risen. "The Houthi threat against shipping in the Red Sea and Gulf of Aden has also gone up," said Jakob Larsen, head of security at Bimco, which represents global shipowners. "The Houthis now threaten merchant ships with affiliation to Israel or the U.S., but attacks against merchant ships with other affiliations cannot be ruled out." Larsen said it is expected that U.S. warships and merchant ships affiliated with Israel or the U.S. would be the preferred targets for the Iranians. Integrated logistics provider Maersk announced Friday it is temporarily suspending port calls to Israel's largest container port, Haifa. The $4.2 billion cargo facility at Haifa, owned by Adani Group, has been a target of Iranian missiles but has not suffered any damage. Last week, Jugeshinder "Robbie" Singh, CFO of the Adani, debunked misinformation posted that the port was on fire from a strike on Iranian social media. Bimco's Larsen warned Iran could attempt a wider disruption of commercial shipping in the Strait of Hormuz through attacks on merchant ships. Antiship missiles or drones of both airborne and surface types could be used in these attacks, he said. "The laying of sea mines would constitute another dangerous development, but Iran's intent to do so is questionable due to the risk to Iran-affiliated commercial ships and the risk of environmental disaster in case a ship is damaged," said Larsen. The Strait of Hormuz, which connects the Persian Gulf to the Arabian Sea, is recognized as one of the world's most important oil chokepoints. The inability of oil to traverse through the Strait of Hormuz, even temporarily, can ratchet up global energy prices, raise shipping costs and create significant supply delays. In 2023, oil flows through the waterway averaged 20.9 million barrels per day, according to the U.S. Energy Information Administration, accounting for about 20% of global petroleum liquids consumption. "Given the Iranian threat to U.S. military bases in the region, availability of warships for protection of commercial shipping is probably limited, especially for commercial ships with no affiliation to the U.S. or Israel," Larsen said. The Strait of Hormuz handles less than 4% of global container trade but the ports of Jebel Ali and Khor Fakkan are critical intermediary points for global shipping networks in the region. The majority of cargo volumes from those ports are destined for Dubai, which has become a hub for the movement of freight with feeder services in the Persian Gulf, South Asia, and East Africa. The conflict in the region has also sparked ocean freight rates to surge from Shanghai to the Arabian Gulf's largest port, Jebel Ali. Freight intelligence firm Xeneta said average spot rates have increased 55% month-over-month, prior to the conflict escalation between Israel and Iran. Rates are now $2,761 per forty-foot equivalent unit (FEU), a standard unit for measuring the capacity of container ships and volume of cargo. On the tanker side, spot rates for very large crude carrier (VLCC) voyages between the Middle East and China are up 154% week-over-week. Rates on the long-range tankers' (LR2) Middle East-Japan trade route are up 148% and Middle East-Japan very large gas carrier (VLGC) rates are up 33%. The reason behind the increase in rates includes the added expenses on security measures, higher bunker fuel prices, and fuel costs as vessels use more fuel due to faster sailing through high-risk areas. Marsh McLennan, the world's largest marine insurance broker, noted hull and machinery insurance rates for vessels transiting the Strait of Hormuz have increased by more than 60%. In light of the latest wave of defense measures, Bimco is encouraging shipowners to review their security risk assessments and carefully consider mitigation measures. "Merchant ships in the area should consider reducing their exposure to threats from Iran, for example, by routing away from the Iranian coast," said Larsen. "We also recommend that ships maintain close contact to naval forces in the area through UK Maritime Trade Operations, maintain strong vigilance and increased lookout, report suspicious sightings and events to UKMTO, and increase the resilience of ships to absorb damage by ensuring watertight integrity and readiness of damage control organization including firefighting capability." "Bimco never directly recommends shipowners to completely stay away from a conflict area. Such a decision should be taken by the shipowner, taking into consideration all relevant factors of the security risk assessment, including, for example, the threat, the ship's vulnerabilities, and the risk acceptance level of seafarers, the shipowner, and the cargo owner."
CNBC
6 days ago
- Business
- CNBC
Shipping groups are starting to shy away from the Strait of Hormuz as Israel-Iran conflict rages on
Some shipowners are opting to steer clear of the strategically important Strait of Hormuz, according to the world's largest shipping association, reflecting a growing sense of industry unease as the Israel-Iran conflict rages on. Israel's surprise attack on Iran's military and nuclear infrastructure on Friday has been followed by four days of escalating warfare between the regional foes. That has prompted shipowners to exercise an extra degree of caution in both the Red Sea and the Strait of Hormuz, a critical gateway to the world's oil industry — and a vital entry point for container ships calling at Dubai's massive Jebel Ali Port. Jakob Larsen, head of security at Bimco, which represents global shipowners, said the Israel-Iran conflict seems to be escalating, causing concerns in the shipowner community and prompting a "modest drop" in the number of ships sailing through the area. Bimco, which typically doesn't encourage vessels to stay away from certain areas, said the situation has introduced an element of uncertainty. "Circumstances and risk tolerance vary widely across shipowners. It appears that most shipowners currently choose to proceed, while some seem to stay away," Larsen told CNBC by email. "During periods of heightened security threats, freight rates and crew wages often rise, creating an economic incentive for some to take the risk of passing through conflict zones. While these dynamics may seem rudimentary, they are the very mechanisms that have sustained global trade through conflicts and wars for centuries," he added. The Strait of Hormuz, which connects the Persian Gulf to the Arabian Sea, is recognized as one of the world's most important oil chokepoints. In 2023, oil flows through the waterway averaged 20.9 million barrels per day, according to the U.S. Energy Information Administration, accounting for about 20% of global petroleum liquids consumption. The inability of oil to traverse through the Strait of Hormuz, even temporarily, can ratchet up global energy prices, raise shipping costs and create significant supply delays. Alongside oil, the Strait of Hormuz is also key for global container trade. That's because ports in this region (Jebel Ali and Khor Fakkan) are transshipment hubs, which means they serve as intermediary points in global shipping networks. The majority of cargo volumes from those ports are destined for Dubai, which has become a hub for the movement of freight with feeder services in the Persian Gulf, South Asia and East Africa. Peter Tirschwell, vice president for maritime and trade at S&P Global Market Intelligence, said there have been indications that shipping groups are starting to "shy away" from navigating the Strait of Hormuz in recent days, without naming any specific firms. "You could see the impact that the Houthi rebels had on shipping through the Red Sea. Even though there [are] very few recent attacks on shipping in that region, nevertheless the threat has sent the vast majority of container trade moving around the south of Africa. That has been happening for the past year," Tirschwell told CNBC's "Squawk Box Asia" on Monday. "The ocean carriers have no plans to go back in mass into the Red Sea and so, the very threat of military activity around a narrow important routing like the Strait of Hormuz is going to be enough to significantly disrupt shipping," he added. Freight rates jumped after the Israeli attacks on Iran last week. Indeed, data published Monday from analytics firm Kpler showed Mideast Gulf tanker freight rates to China surged 24% on Friday to $1.67 per barrel. The upswing in VLCC (very large crude carrier) freight rates reflected the largest daily move year-to-date, albeit from a relative lull in June, and reaffirmed the level of perceived risk in the area. Analysts at Kpler said more increases in freight rates are likely as the situation remains highly unstable, although maritime war risk premium remains unchanged for now. David Smith, head of hull and marine liabilities at insurance broker McGill and Partners, said shipping insurance rates, at least for the time being, "remain stable with no noticeable increases since the latest hostilities between Israel and Iran." But that "could change dramatically," depending on whether there is escalation in the area, he added. "With War quotes only valid for 48 hours prior to entry into the excluded 'Breach' area, Underwriters do have the ability to rapidly increase premiums in line with the perceived risk," Smith told CNBC by email. A spokesperson for German-based container shipping liner Hapag-Lloyd said the threat level for the Strait of Hormuz remains "significant," albeit without an immediate risk to the maritime sector. Hapag-Lloyd said it does not foresee any bigger issues in crossing the waterway for the moment, while acknowledging that the situation could change in a "very short" period of time. The company added that it has no immediate plans to traverse the Red Sea, however, noting it hasn't done so since the end of December 2023.
Shafaq News
14-06-2025
- Politics
- Shafaq News
Iran mulls closing Strait of Hormuz after Israeli strikes
Shafaq News/ Iran is seriously considering shutting down the Strait of Hormuz, a key global oil route, following Israel's recent airstrikes on its territory, an Iranian lawmaker told Reuters on Saturday. Brigadier General Esmail Kowsari, a senior military official, had confirmed that the option is on the table. 'We are studying the matter carefully and will act decisively if necessary,' he said. The move follows ongoing Israeli attacks that began Friday, with fresh strikes today targeting military and nuclear sites in several Iranian provinces, including Tabriz, Khorramabad, and Kermanshah. The Strait of Hormuz, a narrow waterway between Iran and Oman, handles a significant portion of the world's oil shipments. Any closure would disrupt global energy supplies and maritime trade. Iran has previously threatened to block the strait in response to Western pressure, but the latest escalation raises the stakes. Jakob Larsen, chief safety and security officer at global shipping association BIMCO, confirmed that more vessel operators are avoiding the Red Sea and Persian Gulf. 'If the US is perceived to be involved [in the Israeli assault], the risk of escalation increases significantly,' he cautioned. "Such an escalation could include missile attacks on ships or laying of sea mines in the Strait."
Asharq Al-Awsat
14-06-2025
- Business
- Asharq Al-Awsat
Ships Warned to Avoid Red Sea, Log Hormuz Voyages after Israel Hits Iran
Merchant shipping is continuing to pass through the Strait of Hormuz despite Israel's attacks on Iran on Friday, the multinational, US-led Combined Maritime Force said, although some shipowners were looking to avoid the region. Iran has in the past threatened to close the critical Strait of Hormuz to traffic in retaliation for Western pressure. Any closure of the Strait could restrict trade and impact global oil prices. "The Strait of Hormuz remains open and commercial traffic continues to flow uninterrupted," the Combined Maritime Force said in advisory, adding that events over the past day had increased the likelihood of regional conflict to "significant". Greece and Britain have advised their merchant shipping fleets to avoid sailing through the Gulf of Aden and to log all voyages through the Strait of Hormuz following Israel's attacks on Iran, documents seen by Reuters showed. "We have reports that more ship owners are now exercising extra caution and are opting to stay away from the Red Sea' and the Arabian Gulf, said Jakob Larsen, chief safety & security officer with shipping association BIMCO. If the United States is perceived to be involved in any attacks, "the risk of escalation increases significantly", Larsen said. "Such an escalation could include missile attacks on ships or laying of sea mines in the Strait (of Hormuz)." Israel said it had targeted nuclear facilities, ballistic missile factories and military commanders during the start of a prolonged operation to prevent Tehran from building an atomic weapon. Iran denies having any such plan. "Hormuz is a critical waterway, without alternative, for tanker trades and any impediment or threat to free movement of shipping would have a significant effect upon the world's economy," tanker shipping association INTERTANKO said. Greek ship owners were urged to send details of their vessels sailing through the Strait of Hormuz to Greece's maritime ministry, according to one of the documents issued by Greece's shipping association, which was sent on Friday. Greek owners control the world's biggest tanker fleet. "Due to developments in the Middle East and the escalation of military actions in the wider region, the (Greek) Ministry of Shipping ... urgently calls on shipping companies to send ... the details of Greek-owned ships that are sailing in the maritime area of the Strait of Hormuz," the document said. All UK-flagged vessels, which include the Gibraltar, Bermuda and Isle of Man 'red ensign' registries, were advised to avoid sailing through the southern Red Sea and the Gulf of Aden, a separate document issued by the UK's transport ministry said. If sailing through those areas, vessels must adhere to their highest level of security measures and limit the number of crew on deck during voyages, said the advisory, seen by Reuters. The European Union's naval mission in the Red Sea, Aspides, is continuing operations as normal but is monitoring developments in the region, an Aspides official told Reuters.
Business Recorder
14-06-2025
- Business
- Business Recorder
Ships warned to avoid Red Sea, log Hormuz voyages
ATHENS: Merchant shipping is continuing to pass through the Strait of Hormuz despite Israel's attacks on Iran on Friday, the multinational, US-led Combined Maritime Force said, although some shipowners were looking to avoid the region. Iran has in the past threatened to close the critical Strait of Hormuz to traffic in retaliation for Western pressure. Any closure of the Strait could restrict trade and impact global oil prices. 'The Strait of Hormuz remains open and commercial traffic continues to flow uninterrupted,' the Combined Maritime Force said in advisory, adding that events over the past day had increased the likelihood of regional conflict to 'significant'. Greece and Britain have advised their merchant shipping fleets to avoid sailing through the Gulf of Aden and to log all voyages through the Strait of Hormuz following Israel's attacks on Iran, documents seen by Reuters showed. 'We have reports that more ship owners are now exercising extra caution and are opting to stay away from the Red Sea and the Persian Gulf,' said Jakob Larsen, chief safety & security officer with shipping association BIMCO. If the United States is perceived to be involved in any attacks, 'the risk of escalation increases significantly', Larsen said. 'Such an escalation could include missile attacks on ships or laying of sea mines in the Strait (of Hormuz).'
