Shipping, Oil Prices May Rise as US–Israel, Iran Clash Escalates

Growing military tensions between the United States, Israel, and Iran are raising fears of disruption to shipping routes and possible increases in global oil prices.

By Precious E.

Fresh fighting between the United States, Israel, and Iran has raised fears of disruption to global shipping and oil supply, with maritime operators warning of growing risks across major sea routes.

The latest round of military exchanges has placed the Strait of Hormuz and surrounding waters under intense scrutiny. The narrow passage handles a large share of the world’s crude exports, making it one of the most sensitive chokepoints in global trade.

Security alerts have been circulated to shipowners operating in the Arabian Gulf, the Gulf of Oman, and the northern Arabian Sea. Operators have been advised to heighten surveillance and review transit plans as tensions remain high.

Shipping, Oil Prices Under Pressure as Strait of Hormuz Risk Grows

Shipping and oil prices are closely linked to stability in the Strait of Hormuz. Any threat to safe passage through the corridor often translates into higher freight costs and rising crude benchmarks.

In recent days, Israel confirmed it carried out what it described as preventive strikes on Iranian targets. Iran responded with missile attacks directed at Israel. Reports also indicate that Iranian forces targeted locations in Saudi Arabia and struck US military facilities in Qatar, Kuwait, the United Arab Emirates, and Bahrain.

The widening theatre of operations has increased concern among insurers and shipowners. War-risk premiums for vessels operating in the region are being reviewed. Some shipping lines are weighing alternative routes, though detours can add days to delivery schedules and raise fuel costs.

Maritime advisory groups have also warned about the possibility of missile and drone activity near commercial routes. There are additional fears of electronic interference that could affect navigation systems, including the Automated Identification System used to track vessel movements.

Although there has been no confirmed large-scale disruption to tanker traffic, industry observers say even limited incidents can unsettle markets. A direct hit on port facilities or a commercial vessel would likely send oil prices sharply higher.

Retired ship captain and maritime consultant Ade Olopoenia said the situation could quickly affect global energy flows if it persists. He noted that Iran and Iraq remain major exporters of crude and refined petroleum products.

According to him, prolonged instability would drive up the cost of moving oil cargoes through the Gulf, as shipowners factor in security risks. Vessels entering what is perceived as a conflict zone typically face elevated insurance costs and additional security measures.

Energy markets are highly sensitive to developments in the Gulf region. A sustained interruption could tighten supply, push up oil prices, and filter through to higher transport and consumer costs worldwide.

For oil-dependent economies, including major importers in Asia and Europe, any sustained spike in shipping and oil prices would increase inflationary pressure. Exporting countries could also face logistical hurdles if ports or transit routes become unsafe.

Diplomatic efforts are under way to prevent further escalation. Until there is clarity, however, shipping and oil prices are likely to remain volatile as traders and maritime operators react to developments in the region.