Iran-U.S. war chokes key shipping lane and threatens global cargo industry

Industries like automotive manufacturing and consumer electronics could see slowdowns or production halts, according to Abuwasel, who also expects delays for pharmaceuticals, medical supplies and temperature-controlled goods the longer this conflict drags on.

Historically, geopolitical shocks tend to fade quickly when it comes to economic impact. Last summer’s flare-up between the U.S. and Iran, for example, led to a brief spike in crude prices to about $80 a barrel before they quickly stabilized. The Strait of Hormuz avoided mass disruptions, despite initial fears.

This time, analysts say, is different.

“The scale [of Iran’s retaliation] has been a big, big surprise,” Jorge León, head of geopolitical analysis at research company Rystad Energy, told NBC News on Saturday in the aftermath of the U.S.-Israeli attacks.

Last year, Iran’s retaliatory strikes were “limited” and “very telegraphed,” he said. This time, the scope and intensity have been broader, adding, “This is a totally different world from what the market was anticipating.”

In addition to disrupting trade, it is also expected to make shipping more expensive, with insurers canceling policies and raising the price of coverage. When canceling, insurers are offering coverage at new renegotiated prices, not refusing coverage, according to brokers.

This past weekend, the insurance broker Marsh predicted insurance prices could rise as much as 50% in the coming days. With tensions rising and at least one oil tanker already damaged, Marcus Baker, Marsh Global’s head of Marine, Cargo and Logistics, said he expects the cost of insurance could potentially increase as much as 100%.

“You’ve got, you know, 25 crewmen on one of these ships who are all making a decision to go up into an area where they could get bombed tomorrow. And I think that is a fundamental thing that many ship owners are now considering more than they might have done 20 or 30 years ago,” said Baker.

A crew member was killed on Monday after an oil tanker was targeted by an unmanned boat in the Gulf of Oman, Oman’s Maritime Security Center said in a statement on X. It said the crew of 21 people had to be evacuated due to flames, but one member of the crew was killed by an explosion in the engine room.

In addition to the danger posed to crews, tankers are being stranded and damaged, Reuters reported. Ken Fichtelman, head of U.S. marine and cargo for insurance broker McGill and Partners, said he is expecting insurance prices could more than double — and not just in the Persian Gulf.