SOME shipowners are opting to avoid 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 last 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, reports CNBC.
'Circumstances and risk tolerance vary widely across shipowners. It appears that most shipowners currently choose to proceed, while some seem to stay away,' Mr 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.
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,' Mr 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.
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.
SeaNews Turkey
Israel's surprise attack on Iran's military and nuclear infrastructure last 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, reports CNBC.
'Circumstances and risk tolerance vary widely across shipowners. It appears that most shipowners currently choose to proceed, while some seem to stay away,' Mr 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.
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,' Mr 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.
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.
SeaNews Turkey
