Israeli air and missile strikes on Iran in the early hours of Friday have raised the risk of disruption to shipping in the Mideast Gulf, prompting concerns over rising freight rates, insurance costs and vessel safety.
The escalation has heightened tensions in one of the world's most critical oil and shipping corridors, centred on the strait of Hormuz — a chokepoint for about a fifth of global oil supply. Market participants warn that freight rates could surge if the conflict drags on or if Iran launches a retaliatory strike.
The Israeli operation targeted military facilities and infrastructure linked to Iran's nuclear programme, according to Israeli officials, who described the strikes as an act of self-defence. Israel has warned that Iran is closer than ever to acquiring a nuclear weapon.
Oil prices surged following the strikes, reflecting concern about possible supply disruptions. At 08:30 GMT, the Ice front-month August Brent contract was at $73.51/bl, up by $4.15/bl from its 12 June settlement. Nymex July WTI was at $72.24/bl, up by $4.20/bl. Earlier in Asian trading, Brent had climbed as high as $78.50/bl and WTI reached $77.62/bl.
Freight Market Reacts
Ships operating in or transiting the Mideast Gulf and the strait of Hormuz could face higher costs and delays. "Insurance companies could raise the cost of additional war risk premiums (AWRP) if the conflict continues for a long time," a shipbroker said.
Other freight market participants echoed this view. "Mideast Gulf freight rates could spike because owners will avoid going there," another source said, adding that shipowners are likely to err on the side of caution.
The extent of the impact will depend on how long the hostilities last and the scale of Iran's retaliation. "The main thing to watch... is how Iran will retaliate. Shipping's stance would highly hinge on the degree of retaliation," a tanker broker said.
The situation could also trigger operational disruptions, particularly for cargoes yet to load. "There is a possibility that the latest spat could fall under the force majeure clause, which could allow the cancellation of charters," a broker said. Force majeure clauses in charter parties release both parties from liability when extraordinary events — such as war — prevent contract fulfilment. But it remains unclear whether this incident meets that threshold.
Higher oil prices could also push up bunker fuel costs, adding further upward pressure on freight rates, a shipowner said.
Freight and energy markets are closely watching for signs of Iranian retaliation, which could worsen supply risks and increase volatility. "That [Zionist] regime should anticipate a severe punishment. By God's grace, the powerful arm of the Islamic Republic's Armed Forces won't let them go unpunished," Iran's Supreme Leader Ayatollah Ali Khamenei said on 13 June on social media platform X.
While spot rates and war risk premiums are expected to rise in the short term, most market participants are adopting a wait-and-see approach. "The freight market has not yet reacted and rates in the Mideast Gulf did not jump on Friday, but nobody can predict how the conflict will develop further or how many more black swans there will be," a broker said.
