Could Iran War spike freight rates, oil prices and port congestion?

Unless there is a quick resolution to the US/Israeli war with Iran, global container freight rates could remain high through 2026 accompanied by higher oil prices and port congestion, according to container shipping analyst Lars Jensen, CEO, Vespucci Maritime.

Jensen spoke to AJOT on March 1st at the start of the S&P Global Trans Pacific Maritime (TPM 2026) conference, taking place in Long Beach, California: “The immediate impact is the Strait of Hormuz is effectively closed, at least for container shipping …. And that, of course, makes it very difficult for any importers and exporters in the Gulf area.”

That means that container shipping that was starting to go through the Red Sea and through the Suez Canal now stops and resumes taking the longer route around the coast of Africa: “The next thing is these raises the risk profile dramatically in the Red Sea. Let's keep in mind it's not because Iran is shooting at anybody over the Red Sea, but it's because the Houthis, who are aligned with the Iranians, are exceedingly likely they will use this (attack on Iran) to now also target, especially Israeli and US interests."

The result is that: “CMA/CGM they have a number of services which they, for the past year, have actually operated through the Red Sea … They announced here today, that these services will now also be redirected back and go around Africa. So, I think this tells us that the risk profile in the Red Sea has also heightened significantly.”

There had been hope that the Suez Canal route was about to open up: “If we look over the last …. three to four weeks, there was definitely optimism that we were heading towards a normalization of the Red Sea. It was also my assessment that that is where we were heading and we were beginning to see a normalization. The only caveat was if war broke out between the US and Iran, this would be off the table. That's exactly what we see now. “

Higher Oil Prices

Jensen is worried that the impact of higher oil prices could be prolonged: “Some of the first press reports I've seen indicate something like 10% to 20% increase is what we should expect when the exchange is open here Monday [March 2, 2026] morning. So, we'll have to await, but it is a substantial impact … We are especially flying blind, because I don't think anybody has any clear picture of what is the next few days or weeks or months are going to bring. Is this going bring about a rapid regime change (in Iran) tomorrow? That seems very, very unlikely. And if that is the case, then we're in for a prolonged period of uncertainty in the Middle East.”

Higher Freight Rates

The end result could also be higher container freight rates in 2026: “And the impact on freight rates will be initially what has been announced already by several carriers today. They're introducing new emergency surcharges to the tune of $3,000 per forty-foot container for cargo to and from the Gulf, and also in some cases to and from the Red Sea. That is only the beginning. The ripple effects here will be that you have quite a lot of vessels that are already headed to the Gulf that now cannot get there. So, they will go to nearby hubs.”

Congestion at Ports

Jensen said the next impact from the war will be congestion at ports: “And that will then create congestion. If we think back a couple of years at the outbreak of the Red Sea crisis it was the same play out. There was a lot of ships that were bound for the Red Sea that suddenly couldn't get in there. So, cargo for the Red Sea was then discharged in these locations, creating congestion problems back then. It also led to congestion problems even in Singapore.”

The effect could then expand further: “So congestion in major ports, we've seen that many times over the last six years. That leads to vessels waiting. It leads to delays and it leads to reduction of available capacity leading to increasing freight rates. For the container lines, this likely means an upwards pressure on spot rates initially to and from the Gulf and Red Sea. But if this lasts more than just a few days, that will result in upwards pressure on Asia and Europe rates, if you get congestion out in Asia, (there could be) upwards rates even on the Transpacific, ripples that we've seen before.”

Impact on Air Freight

Jensen said that while he is not an expert on air freight, the impact from the war with Iran is already having an impact on air freight in the Middle East and between Asia and Europe: “Let’s just keep in mind I'm not an expert on air freight, right? But especially Dubai is a major hub for air freight operations, is also a locus for some of these sea/air products where shippers …. are using ocean borne transportation for part of the journey and air freight for the other part as a mix. And Dubai is a major hub for this. The airport in Dubai is closed just as all other major airports in the region. It would appear that the airport in Dubai was even hit by some debris from a shot-down drone. So, one of the world's largest hubs for air freight is right now not available.”

Impact on Europe Asia Air Freight

The implications of this are that: “Air freight also tends to move in the belly of passenger planes. And passenger planes obviously are not flying either. A lot of the capacity between Europe and Asia has to fly south around Russia because of the problems between Europe and Russia. And now it also has to fly north of the Middle Eastern trouble area. That leaves a very, very thin corridor south of Russia and north of the conflict area, which at least when you look at online airplane trackers, that corridor right now seems to be chock a block full of aircraft. So again, I'm not an air freight expert, but I would definitely assume that there is an instantaneous acute problem with having enough capacity on air freight between Europe and Asia.”

Houthis Attacks on Shipping Could Resume

Jensen said added impact could be resumption of attacks by Iran’s Houthi ally whose attacks on Red Sea shipping shut down most Suez Canal traffic: “I'm not a military expert, but let's look at the Houthis in Yemen. The Houthis in Yemen, despite repeated bombings, both under the Biden administration and then under the Trump administration and bombings repeatedly by Israel, all of those bombings never eliminated the Houthis ability to shoot at ships in the Red Sea. And that was just the Houthis. So, the notion that repeated bombings of Iran could lead to a point where they would be unable to launch attacks at neighboring states …. seems a bit farfetched … If you learn from the Red Sea, you don't need to shoot at every ship at all. You just need to shoot at one ship every once in a while, to prove that the risk is real. That is sufficient for most commercial operators not to risk the lives of their crew, not to risk their cargo … But it's not about controlling a body of water. You just need to deny it to somebody else by making it sufficiently risky.”