Tensions continue to rise as the Israeli military announced a new round of airstrikes on Tehran late on March 4. According to reports, Iranian sites including Mehrabad Airport, areas west of Azadi Square, and Chitgar were targeted by invading fighter jets.
In response, Iran's Islamic Revolutionary Guard Corps declared that the 18th round of its "True Promise 4" operation has commenced. The Guard also claimed that in the 17th round, its hypersonic missiles and attack drones breached the U.S. "THAAD" defense system, striking the Israeli Ministry of Defense building and Ben Gurion International Airport.
Iran’s Supreme National Security Council Secretary, Ali Larijani, stated on social media that over 500 U.S. soldiers have been killed in recent days, warning that any harm to Supreme Leader Khamenei would come at a heavy cost to the Trump administration.
The Israeli military reported that it has dropped more than 5,000 bombs on Iranian targets since the conflict began. Meanwhile, the White House confirmed that U.S. forces have struck over 2,000 targets, destroying numerous missiles, launchers, and drones, and sinking more than 20 Iranian vessels, including a submarine. The U.S. Defense Secretary noted that a U.S. submarine sank an Iranian warship in the Indian Ocean on March 3, with Sri Lankan authorities recovering 87 bodies near the attacked vessel.
Iran also deployed its "Hadi 110" high-speed suicide drone for the first time in this conflict. The drone, launched via rocket booster, can reach speeds of up to 500 km/h, making it Iran’s fastest unmanned attack aircraft.
In a related development, Russian President Vladimir Putin indicated that Russia is considering proactively cutting off natural gas supplies to Europe. He cited rising oil and gas prices driven by restrictions on Russian energy and the U.S.-Israeli aggression against Iran. With the EU planning a full ban on Russian pipeline and liquefied natural gas, Putin suggested that Russia might preemptively halt supplies to Europe and redirect them to emerging markets.
International oil price gains have moderated. Recent data showed U.S. ADP employment rose by 63,000 in February, the highest in three months, while the ISM Services PMI hit its highest level since July 2022. Service sector inflation also eased to a near one-year low. U.S. stock indices closed higher, with gold and silver futures posting modest gains. WTI crude futures saw a slight increase, trading around $76 per barrel in early trading.
The container shipping market is experiencing heightened bullish sentiment. Following joint U.S.-Israeli strikes on Iranian targets on February 28, tensions in the Middle East escalated sharply, driving up the containerized freight index (European route) futures, with the main EC2604 contract hitting limit-up for three consecutive days.
Analysts note that the impact is likely short-term, primarily affecting near-term schedules. If conflicts de-escalate, the market is expected to stabilize. The blockage of the Strait of Hormuz poses greater risks for oil and gas shipping than for container transport. Most commercial vessels have already rerouted via the Cape of Good Hope due to the Red Sea crisis, limiting the immediate impact on container shipping. Higher oil prices and insurance costs have had a limited effect on per-container expenses.
Market sentiment remains strong as several shipping lines suspend Red Sea transits, delaying hopes of resumed navigation. If the Strait of Hormuz remains closed, short-term supply chain disruptions could occur. However, current rerouting measures may mitigate the impact compared to the 2023 Red Sea crisis.
Spot freight rates remain weak, with only a few carriers announcing rate hikes for late March. Post-holiday capacity recovery is above average, and European port congestion due to extreme weather has had limited effect. Demand remains subdued, with weak replenishment orders amid slow consumer recovery in Europe and the U.S. Global trade uncertainties further dampen short-term demand.
The market faces a tug-of-war between supply constraints from geopolitical risks and demand weakness from Europe’s economic slowdown. Future freight rates will depend on both supply and demand dynamics. If Middle East conflicts persist, requiring long-term rerouting, freight rates could approach levels seen during the Red Sea crisis.
Investors are advised to monitor de-escalation signals, such as reduced attacks, resumed negotiations, or carriers setting rates below announced hikes. Beyond geopolitical risks, other bearish factors include potential monetary policy tightening amid stagflation fears, improved shipping efficiency from route adjustments, and a glut of new vessel deliveries. Global undelivered new ship orders reached 11.46 million TEU as of January 2026, a record high, which may suppress spot freight rates over the next one to four years.
Market participants should also watch war surcharges and booking volume recovery in late March. Given high volatility, risk management is crucial.