Strait of Hormuz Tensions Threaten Gulf Shipping Routes

Post by : Mumtaaz Qadiri

Businesses in the UAE, Saudi Arabia, and other Gulf countries are carefully watching the situation around the Strait of Hormuz, a key shipping route for oil and goods.

Sajith Marakar, Managing Director of Abu Dhabi-based marine inspection company Consolidated Bureau, said,

“Ships are still passing through the Strait of Hormuz, but there are signs that it might be closed. If that happens, it could cause big problems for global oil and goods trade.”

If the area is declared a war zone, insurance companies may stop covering ships passing through it. This would force shipping companies to find longer and more expensive routes, adding to delays and costs. The industry is already facing issues due to fewer ships using the Red Sea because of recent Houthi attacks.

Recently, the Iranian Parliament approved a proposal to block the Strait of Hormuz after the US attacked Iran’s nuclear facilities. However, this decision has not yet been put into action.

Why is this strait important?

The Strait of Hormuz is responsible for carrying about 20% of the world’s oil supply, making it one of the most critical sea routes globally.

If it gets blocked, Gulf countries like Bahrain, Kuwait, Dammam (Saudi Arabia), and Qatar may face delays in receiving goods. This could also lead to higher prices for products in the region.

During the Red Sea crisis last year, cargo built up in UAE ports, and ships had trouble keeping schedules, especially to places like Jeddah.

To reduce the impact, businesses are being advised to use road transport within the Gulf, where possible.

“The GCC has good road networks, and cargo can still move through ports in the UAE and Oman,” Marakar said.

Gulf shipping crisis