Middle East conflict triggers turmoil for global shipping and aviation

Shipping and air transport were thrown into turmoil this week as the Middle East conflict intensified, prompting fresh security warnings, a surge in tanker earnings and widespread suspensions across key trade corridors.

In Athens, Shipping Minister Vassilis Kikilias said seagoing shipping “should be out of military conflicts”, describing the targeting of sailors as unacceptable, as missile and drone strikes on merchant vessels were reported in the Gulf region.

He told Skai television that developments were directly affecting international shipping and, by extension, the global economy, noting that roughly 20 per cent of the world’s oil and between 20 and 25 per cent of global natural gas pass through the Strait of Hormuz.

Attacks on commercial ships, strikes on three port facilities and one offshore installation, injuries to sailors and one reported death have already been recorded.

The incidents do not involve Greek-flagged vessels or Greek interests, although a Greek-owned ship sustained minor damage and continued its voyage.

Kikilias said ten Greek-flagged ships with 85 Greek sailors are currently in the Persian Gulf and five outside it, while about 325 Greece-linked vessels under foreign flags are in the wider region.

The sailors are safe and in constant communication with authorities, he added, with the ministry’s operations room on continuous alert.

He warned that any closure of the Strait of Hormuz would have enormous economic consequences for global trade. At the same time, he urged composure in public statements as the duration and scale of the escalation remain uncertain. The protection of Greeks in the region, he said, remains the government’s top priority.

Against this backdrop, the military escalation has triggered a sharp rally in tanker freight rates, as shipowners factor in heightened geopolitical risk and war-risk premiums.

According to analyses by SSY and Clarksons, the benchmark MEG/East VLCC route (TD3C) has surged to Worldscale 410, translating into time charter equivalent earnings of roughly $220,000 to as much as $400,000 per day, depending on voyage parameters.

On the MEG/US Gulf route, returns are estimated at $120,000–$150,000 per day, while long-haul voyages such as US Gulf to China have reportedly commanded lump sums above $21 million.

Similarly, in the Suezmax segment, some Middle East routes have spiked to as high as WS750, with daily earnings in the $190,000–$300,000 range.

Meanwhile, Mediterranean routes are acting as capacity absorbers as vessels avoid Gulf transits and ballast distances lengthen.

Product tankers are also under pressure. Clean tanker routes from the Middle East to Japan and Europe are yielding between $75,000 and $115,000 per day in some cases, as the rebalancing of diesel and jet fuel flows boosts ton-mile demand.

Brokers say the market is pricing in a prolonged period of tension rather than a short-lived shock, with higher insurance costs, longer voyages and effective capacity constraints tightening supply.

The disruption extends well beyond oil shipping. Global air cargo capacity fell by 18 per cent within 24 hours, according to data from Rotate, as airspace closures and flight suspensions rippled across the region.

Major Gulf carriers including Qatar Airways, Emirates and Etihad Airways temporarily suspended or restricted cargo operations, citing evolving airspace constraints.

At sea, container shipping lines such as MSC Mediterranean Shipping Company, CMA CGM and Maersk have suspended bookings or rerouted services, with some vessels diverting via the Cape of Good Hope instead of transiting the Suez Canal and the Red Sea corridor.

Chinese state-owned COSCO Shipping Lines has instructed ships already in the Gulf to proceed to safe waters once operations are completed and advised vessels heading to the region to prioritise navigational safety.

The Strait of Hormuz, through which roughly a quarter of global oil and a fifth of LNG flows, has seen hundreds of vessels anchor outside the strait as a precaution, according to data reported by Reuters News Service.

At the same time, maritime intelligence firms report a spike in GPS and AIS interference affecting more than 1,100 vessels within 24 hours, complicating navigation and raising collision risk.

This electronic disruption, combined with kinetic threats, underscores that the security challenge now extends beyond missiles and drones to technological interference.

In Cyprus, the Deputy Ministry of Shipping has issued explicit guidance urging owners and operators of Cyprus-flagged vessels to avoid calls and commercial transactions in ports or regions where armed conflict or civil unrest prevail, and to maintain heightened vigilance in line with the ISPS Code.

Captains were advised to step up onboard security measures and consider route reassessment, particularly around the Strait of Hormuz and other high-risk maritime areas.

The advisory mirrors similar warnings from Greece, which has urged Greek-flagged vessels to avoid the Persian Gulf, Gulf of Oman and Strait of Hormuz amid rising missile and navigational risks.

Meanwhile, widespread rerouting around the Gulf is disrupting container traffic and extending transit times by 10–15 days via the Cape of Good Hope, with conflict surcharges of several thousand dollars per container reported.

For Cyprus, an island economy reliant on maritime logistics and air connectivity, these delays risk feeding into higher import costs and supply chain uncertainty.

Domestic reporting notes that Cypriot authorities, including the President Nikos Christodoulides, have held talks with European and Greek counterparts to coordinate responses and safeguard economic resilience.

Airline suspensions affecting routes in and out of Larnaca and Paphos have also been reported.

At the same time, the Electricity Authority of Cyprus (EAC) has said fuel stocks are sufficient for approximately two months, with scheduled shipments continuing despite regional tensions.

However, sustained disruption in the Gulf could translate into higher import costs and upward pressure on domestic fuel and electricity prices.

Business groups including the Cyprus Chamber of Commerce and Industry (Keve) and the Employers and Industrialists Federation (Oev) have called for calm while monitoring supply chain and energy risks.