Key Points: Following attacks on Iran by the US and Israel, major shipping firms have suspended operations through the strategically vital Strait of Hormuz. The Middle East conflict has heightened concerns over prolonged disruptions to global trade along critical maritime corridors. Maersk, MSC, Hapag-Lloyd, and CMA CGM have all issued new guidance in response to the deteriorating security situation. The escalating war in the Middle East has intensified fears of potential long-term disruptions to global trade passing through key maritime chokepoints like the Strait of Hormuz and the Bab el-Mandeb strait. After attacks on Iran by the US and Israel last weekend, container shipping giants have suspended transits through the strategically important Strait of Hormuz and are rerouting vessels around the southern tip of Africa. Danish shipping company Maersk stated in an announcement that it would pause all vessel transits through the Strait of Hormuz until further notice, warning of potential delays for services calling at ports in the Arabian Gulf. The Strait of Hormuz, located in the Gulf between Oman and Iran, is recognized as one of the world's most critical oil transit chokepoints. According to the U.S. Energy Information Administration, the average oil flow through this waterway in 2023 was 20.9 million barrels per day, accounting for approximately 20% of global petroleum liquid consumption. Maersk, widely seen as a barometer for global trade, also stated that the Middle East situation has prompted it to suspend future voyages for services east of the Suez Canal that transit the Bab el-Mandeb strait until further notice. The Bab el-Mandeb strait is a narrow maritime chokepoint situated between the Horn of Africa and the Middle East, connecting the Red Sea with the Gulf of Aden and the Indian Ocean. It is estimated that oil trade through the Bab el-Mandeb accounted for 12% of total seaborne oil trade, and LNG trade accounted for 8%, in the first half of 2023. Maersk indicated that all vessels on its Middle East-India to Mediterranean and Middle East-India to US East Coast services will be rerouted via the Cape of Good Hope. Peter Sand, Chief Analyst at Xeneta, stated that container freight rates in the Middle East should factor in increases, at least for the duration of the conflict, adding that for ocean freight there are "no real alternatives." "In recent years, geopolitical risks have shown their ugly face with higher frequency and greater severity than before," Sand told media on Monday. "I think it's also fair to say that the industry is somewhat fatigued, because you make 10 contingency plans and then you have to tear them all up because there's a new twist and a new angle." Even a temporary inability for tankers to transit the Strait of Hormuz could push up global energy prices, increase transportation costs, and cause significant supply delays. The Strait of Hormuz is also crucial for global container trade. Ports in the region, such as Jebel Ali and Khalifa Port, act as transshipment hubs within the global shipping network. Besides Maersk, German container line Hapag-Lloyd stated over the weekend that it would suspend all vessel transits through the Strait of Hormuz, citing the safety and security of its crew. France's CMA CGM said on Saturday that it had instructed all its vessels in the Gulf and heading towards the area to proceed to safe locations. CMA CGM stated that transits via the Suez Canal have also been suspended until further notice, with vessels being rerouted around Africa via the Cape of Good Hope. Mediterranean Shipping Company (MSC), the world's largest container line, said on Monday that it had instructed all its vessels operating in the Gulf area to proceed to designated safe zones and would be closely monitoring further developments. "Extreme Caution" Amrita Sen, Founder and Director of Market Intelligence at Energy Aspects, said on Monday that the key question is what happens with the Strait of Hormuz. She estimated that roughly 15 million barrels of oil and around 80 million metric tons of liquefied natural gas passed through the strait last year. When asked if Iran might attempt to close the strait completely, Sen said, "We think that is unlikely." "The US and Israel would very, very quickly destroy those capabilities. The US military is far, far more powerful than Iran's and could easily suppress any Iranian attempt to close the strait," Sen said. "While we are not saying the strait will be closed, what the US cannot control are sporadic attacks targeting tankers, and that is enough to make the market extremely cautious about sending vessels into the region. And that is what causes disruption/chaos," she added.