Freightos Baltic: Freight market remained firm amid geopolitical tensions

The global ocean freight market has thus far demonstrated resilience in the face of mounting geopolitical tensions in the Middle East. Despite the resurgence of conflict between Israel and Iran late last week, there has been no immediate disruption to major shipping lanes. Nevertheless, market participants are maintaining a cautious stance as uncertainty surrounding the strategic Strait of Hormuz intensifies.

The Strait, a vital chokepoint through which approximately 20% of the world’s crude oil is transported daily, remains operational for now. While speculation persists over a potential closure by Iran, most analysts consider such an escalation unlikely in the near term, citing Tehran’s own dependence on the passage for its oil exports.

From a container shipping perspective, the immediate global impact of a Strait closure would be limited, as only 2–3% of global container volumes transit this waterway. However, regional consequences could be significant. Dubai’s Port of Jebel Ali—a key transhipment hub connecting Asia to Europe and Africa—would be particularly vulnerable. Any abrupt disruption could compel carriers to reroute via South Asia, potentially leading to port congestion and inflationary pressure on regional freight rates.

Across the Pacific, different dynamics are at play. Following the easing of US–China trade tensions on 12 May, American importers accelerated their procurement activities, frontloading cargoes ahead of a possible tariff increase expected in August. However, this rush appears to be moderating. According to the National Retail Federation, the strongest wave of import demand may already have passed, suggesting a softening trajectory for transpacific volumes moving forward.

In contrast, the Asia–Europe trade lane is regaining momentum. As the traditional peak season unfolds, spot rates have surged 24% since the start of June, nearing the $3,000/FEU mark. Further gains are expected as mid-month General Rate Increases (GRIs) take effect, supported by improving demand and tightening vessel space across the route.

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