The escalating war in Iran and rising geopolitical tensions in the Middle East are having far-reaching consequences for global trade. As critical maritime corridors face disruption, the effects are rippling across shipping operations, insurance markets, and supply chains worldwide.
Among the most affected routes is the Strait of Hormuz — a key maritime chokepoint through which approximately 80% of crude oil bound for Asian markets passes, including shipments to China, India, Japan, and South Korea. Since attacks escalated, thousands of vessels have been forced to reroute or remain idle, with traffic through the strait reportedly declining by as much as 94%.
This instability in the Gulf carries direct implications for shipping operations, marine insurance markets, and supply-chain continuity. As global trade routes continue to evolve, companies across the maritime ecosystem are recognising that disruption is no longer an exception but an increasingly permanent feature of the operating environment.
What the pattern of maritime disruptions means for marine, cargo, and logistics
Shipowners, cargo shippers, and logistics-providers face a range of operational challenges when critical maritime routes are disrupted. Chief among these is supply-chain disruption. Heightened security risks in the Strait of Hormuz have implications far beyond the Middle East, as the waterway carries roughly a quarter of global oil shipments.
At the same time, the conflict is driving volatility in marine insurance markets. War-risk premiums for vessels operating in high-risk areas have surged from approximately 0.2% to more than 1% of a ship’s value. For a cargo vessel with a hull value of US$100 million, this could translate to an additional cost of at least US$1 million per voyage.
War-risk insurance policies are issued in seven-day blocks. In response to rapidly changing conditions, insurers have been issuing cancellation notices within 48 to 72 hours to reassess risk exposure and adjust premiums.
Beyond insurance costs, the disruption is creating knock-on effects across global supply chains. Shipping lines may suspend services, ports can experience congestion as vessels reroute, and air freight demand may rise as businesses seek faster alternatives to delayed sea shipments. Companies may also face higher inventory-carrying costs as delivery timelines become less predictable. In addition, major container lines have begun offloading containers from stranded vessels, a move that could create supply-demand imbalances for certain goods while adding to mounting commercial losses across consumer sectors.
The current disruption echoes events in 2024 when attacks on commercial vessels in the Red Sea forced many shipping lines to divert away from the Suez Canal and reroute vessels around the Cape of Good Hope. These diversions added significant transit times while increasing fuel costs and creating congestion at alternative ports. For cargo owners and logistics providers, the result was delayed shipments, higher freight costs, and growing uncertainty around delivery timelines.
This evolving risk landscape reflects a broader trend identified in the Marsh Global Risks Report, which highlights geoeconomic confrontation amid a shifting world order as one of the most significant risks facing businesses globally. In response, building resilience is becoming a strategic priority and the new normal for supply-chain leaders and risk managers.
How can businesses navigate evolving maritime and supply-chain risks?
To operate effectively in an increasingly uncertain environment, organisations need stronger visibility across their supply chains alongside targeted insurance and risk management strategies. These three actions can help organisations strengthen supply-chain resilience:
1. Use data-driven intelligence to strengthen supply chains
Organisations should leverage real-time intelligence on geopolitical developments, shipping routes, and operational disruptions. Access to timely intelligence enables companies to identify emerging risks early and activate contingency plans before disruptions escalate.
Solutions such as Marsh’s World Risk Review and the proprietary Sentrisk platform provide timely geopolitical and risk intelligence, enabling businesses to plan ahead with greater clarity and pivot quickly during periods of uncertainty.
2. Review marine and cargo insurance policies
Companies should reassess their marine and cargo shipping insurance policies to ensure coverage remains appropriate for the evolving risk environment. Given the volatility in war-risk pricing and coverage terms, working with a trusted broker can help businesses better understand their exposure and ensure insurance protection remains adequate.
3. Build resilience early to safeguard against the new operating normal
Organisations that adapt risk management strategies and build resilience early — through stronger intelligence capabilities, diversified routing strategies, and robust insurance programs — will be better positioned to stay ahead of future disruptions and maintain continuity across global supply chains.
Why Marsh
Marsh works with leading cargo shippers, freight forwarders, port operators, and logistics providers across Asia to help them manage complex maritime risks. We support more than 240 port and terminal clients globally and serve as the broker for around 50% of the world’s LNG fleet.
Connect with Marsh to explore how your organisation can strengthen supply-chain resilience and navigate an increasingly complex risk landscape.
FAQ: Trade disruption and shipping risks linked to the Middle East conflict
Updated as of 5 March 2026
The following frequently asked questions address common concerns from cargo owners, shipowners, charterers, and risk managers navigating the evolving risk environment.
1. Should companies continue shipping goods to the Middle East without war-risk insurance?
Operating in high-risk areas without war-risk insurance is strongly discouraged. However, insurance alone should not determine whether shipments proceed.
Even if cargo can be insured against war risks, shipowners and charterers must also consider whether vessels can safely operate in affected areas. Shipping through high-risk routes, particularly those involving the Strait of Hormuz, may expose vessels to attacks, damage, or other operational disruptions.
Companies should evaluate several factors before proceeding, including crew safety, potential loss of life, environmental risks such as pollution incidents, reputational considerations, and the operational feasibility of the voyage. Insurance may provide financial protection, but it does not eliminate the physical risks associated with conflict-affected shipping lanes.
2. Are there alternative routes if shipping lanes in the Gulf are disrupted?
There may be limited alternatives for vessels operating in the Gulf region. Ships already positioned within the Gulf may have few options if conditions deteriorate, particularly if transit through the Strait of Hormuz becomes unsafe. In these situations, some operators may delay movements while monitoring how the situation develops.
3. How could the Middle East conflict disrupt global shipping routes and supply chains?
The potential impact will depend largely on how long the disruption lasts. Prolonged disruption could affect the movement of energy shipments, particularly oil and liquefied natural gas (LNG) exported from the region.
Disruptions to these flows could place additional strain on global supply chains, while heightened risk may also contribute to increased freight rates and shipping costs.
4. Which countries in Asia may be most affected by shipping disruptions related to the Middle East conflict?
Several Asian economies depend heavily on energy imports from the Gulf region, making them more vulnerable to supply disruptions if maritime transport is affected. Countries that may face greater exposure include China, Japan, and South Korea. Many of these countries rely significantly on imports of oil and liquefied natural gas (LNG) from the Middle East. Because LNG shipping capacity is limited and specialised, prolonged disruptions could place additional strain on regional energy supply chains.
5. What happens if war-risk insurance is cancelled while cargo or vessels are already in transit?
In many cases, if a voyage or shipment began before an insurer issued a notice of cancellation, the original policy terms may still apply for that specific transit. However, policy wording varies between insurers. Shipowners and cargo interests should review their insurance documentation and consult with brokers or insurers.
6. Can war-risk insurance be reinstated if coverage is withdrawn?
War-risk coverage can sometimes be reinstated at an additional premium, depending on market conditions and the specific routes involved. In the context of the current Middle East conflict, cargo insurance has generally remained more readily available than vessel hull war insurance. However, insurers may apply route exclusions or require prior approval before allowing vessels to transit certain high-risk areas.
7. How long does war-risk insurance typically last for vessels?
In the context of the current Middle East conflict, most insurers are issuing war-risk cover for short durations, commonly seven days, allowing them to reassess risk exposure and pricing as conditions evolve.
8. What steps should shipowners and cargo owners take to manage supply-chain risks during the conflict?
Businesses involved in maritime trade may consider several proactive measures, including:
- Review insurance coverage.
- Monitor geopolitical developments affecting shipping routes.
- Assess alternative logistics strategies where possible.
- Review charter party agreements and force majeure provisions.
- Maintain close communication with shipping partners, brokers, and insurers.
Given the fluid nature of the situation, organisations should be prepared to adjust operational and risk management strategies as conditions evolve.
