Strait of Hormuz Closure: Global Shipping Crisis & Supply Chain Disruption Analysis

Following the joint US-Israel strikes against Iran, the Iranian Islamic Revolutionary Guard Corps announced the closure of the Strait of Hormuz, severely impacting the global shipping system. Global shipping is facing a double crisis: the closure of the Strait of Hormuz has disrupted the entire Middle East shipping corridor. Multiple ports have suspended operations or faced operational restrictions, and shipping companies have announced the suspension of bookings for cargo destined for the Middle East worldwide.

Strait of Hormuz Closure: All Passage Prohibited

The blatant attacks on Iran by the US and Israel have affected the vital global shipping route, the Strait of Hormuz.

On the evening of February 28, the Iranian Islamic Revolutionary Guard Corps announced a ban on any vessels passing through the Strait of Hormuz, effectively closing the strait.

This move has resulted in ships being stranded in the Persian Gulf, severing key hub ports such as Jebel Ali from global ocean trade. Global shipping giant Mediterranean Shipping Company (MSC) announced the suspension of all cargo bookings to the Middle East worldwide.

The Financial Times learned from brokers that insurance companies have issued policy cancellation notices to vessels transiting this crucial oil chokepoint, with premiums expected to rise by up to 50% in the coming days.

There are no alternative maritime routes through the Persian Gulf. The strait is one of the world's busiest shipping lanes, with 200 to 300 vessels passing through daily, sometimes as frequently as every six minutes during peak hours. Closure of the strait would immediately bring energy transport and container logistics to a standstill, with a structural disruption to the flow of crude oil, refined petroleum products, and containerized cargo.