COSCO Shipping: Due to the escalation of the Middle East conflict, all new booking services for related routes are suspended effective immediately.
The escalating conflict between the US and Iran is having a substantial impact on the global shipping order. COSCO Shipping announced that, effective immediately, it will suspend booking business for several countries in the Persian Gulf.
On March 4, COSCO Shipping posted a service notice on its official account, stating, “In view of the ongoing escalation of conflict in the Middle East and corresponding restrictions on maritime traffic in the Strait of Hormuz, based on the latest risk assessment, we will suspend new bookings on relevant routes effective immediately. The resumption date will be announced separately.”
Since the US and Israel attacked Iran, international crude oil futures prices have continued to climb. As of Tuesday’s close, WTI and Brent crude have risen by over 11% and 12% respectively in the last two trading days. At the time of writing, WTI crude’s daily increase has further expanded to 2.12%.
Suspension covers core ports in the Persian Gulf
According to the COSCO Shipping announcement, the suspension of booking business concerns two-way cargo transportation and has a wide scope.
Specifically, the suspension includes: All new booking business from worldwide to UAE (except Fujairah and Khor Fakkan), Qatar, Bahrain, Iraq, Kingdom of Saudi Arabia (except Jeddah), and Kuwait; as well as all new booking business from these countries and regions to worldwide.
It is worth noting that Fujairah, Khor Fakkan, and Jeddah are located outside the Strait of Hormuz or along the Arabian Sea coast, and are not directly affected by the strait blockade. Therefore, they are excluded from the suspension. This suspension effectively places the major ports inside the Persian Gulf under comprehensive control.
Regarding cargo already on the ships, COSCO Shipping stated it is conducting a comprehensive assessment for subsequent disposition, including considering possible alternative discharge ports. Relevant operations will be strictly carried out in accordance with bill of lading terms and conditions.
Iran warns ships not to transit “wartime status” Strait of Hormuz
The root of this crisis is that the United States and Israel launched a military strike against Iran on February 28, after which the Middle East was plunged into widespread chaos. Oil shipments through the Strait of Hormuz have essentially come to a halt. The Strait of Hormuz handles about one-fifth of the world’s energy transport and is regarded as the global “critical energy chokepoint.”
Iranian media reported that the Islamic Revolutionary Guard Corps released a statement saying that the Strait of Hormuz is in a wartime state, and ships passing through "may face risks from missiles or uncontrolled drones," warning international shipping companies not to use this route. The statement claimed that over ten tankers have already been attacked by Iran for ignoring warnings.
According to CCTV News, late at night on March 2 local time, an adviser to the commander of Iran’s Islamic Revolutionary Guard Corps said, “The Strait of Hormuz is closed, and Iran will strike any ship attempting to pass through.”
At the insurance market level, several of the world’s largest maritime mutual insurance organizations have withdrawn war risk coverage for ships entering the Persian Gulf. Although some shipowners may obtain alternative coverage from other insurers, premiums have surged sharply.
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