Tankers are seen on the Khor Fakkan Container Terminal, the one pure deep-sea port within the area and one of many main container ports within the Sharjah Emirate, alongside the Strait of Hormuz, a waterway via which one-fifth of world oil output passes on June 23, 2025.
Giuseppe Cacace | Afp | Getty Pictures
Ocean freight charges to the Port of Khor Fakkan within the United Arab Emirates are surging as Israel continues to assault Iran and Iran reported its first assault on U.S. army bases, after a weekend that noticed U.S. strikes on Iranian nuclear targets.
Charges from Shanghai to the Khor Fakkan, which is located on the UAE Indian Ocean shoreline, are up 76% compared to mid-Could, in line with spot ocean freight price knowledge tracked by freight intelligence platform Xeneta. The common spot charges have reached $3,341 per forty-foot equal unit (FEU.)
The Port of Khor Fakkan is positioned exterior the Strait of Hormuz. Resulting from its location, the port is taken into account to be some of the vital transshipment hubs for the Arabian Gulf, the Indian Sub-continent, the Gulf of Oman, and the East African markets.
“Shippers within the area have acted with warning as the extent of danger has steadily elevated,” mentioned Peter Sand, chief transport analyst at Xeneta. “Shippers have been frontloading cargo in the latest months, to bolster the provision chain from opposed disruptions to the stream of containerized items.”
The Port of Khor Fakkan has had 81 vessels arrive throughout the previous 24 hours, and 51 ships are anticipated to reach within the subsequent 30 days, in line with VesselFinder.
The battle within the Center East has elevated vessel safety dangers, which have added to operational prices. Vessels are additionally shifting sooner, which ends up in extra gasoline getting used, which additionally provides to prices.
Iran’s parliament voted to approve a closure of the Strait of Hormuz on Sunday, however it could not observe via on the transfer, in line with many consultants. It’s anticipated to focus on ships for assault or seizure as a part of its retaliatory plans, together with ships displaying a public U.S. affiliation, in line with maritime safety agency Ambrey.
One main oil tanker operator, Frontline, not too long ago mentioned it will settle for no new contracts requiring journey within the Strait of Hormuz.
The oil market was buying and selling decrease on Monday and the inventory market response to the escalation within the battle was muted. However Sand mentioned the unfold in ocean freight charges is a number one indicator of danger and uncertainty. The upper the unfold, the larger the indication of market volatility and potential dangers for shippers. “Throughout occasions like this, the unfold out there widens,” Sand mentioned.
Shippers with extra pressing want to maneuver items to guard provide chains pay greater costs and surcharges which might be pushed via by ocean carriers. That is usually a scenario smaller shippers with much less negotiating energy discover themselves in to verify their items are moved. Bigger quantity shippers have extra negotiating energy and might push again in opposition to carriers demanding excessive charges. That disparity in negotiating energy results in the broader unfold in transport charges at completely different ends of the freight market.
That unfold is up from $50 to $1,101 over the previous 40 days (Could 14 to June 23), in line with Xeneta.
“The unfold is displaying the distinction between what the smaller shippers, these with out a lot negotiation energy, versus the freight charges paid by the bigger and stronger shippers,” he mentioned.
