Strait of Hormuz Closure 2026: What It Has Done to Gulf Commodity Trade

Where things stand

The crisis began on 28 February 2026 with US and Israeli strikes on Iran. The Islamic Revolutionary Guard Corps announced the closure of the Strait of Hormuz on 4 March, and by late March declared it shut to vessels trading to and from US, Israeli and allied ports. Brent went through $100 on 8 March and peaked at $126, the largest monthly move on record, in what has been the biggest energy supply shock since the 1970s.

Ceasefires in April and June each lapsed. The US Navy reported clearing more than a hundred mines by late August and opened a widened corridor closer to Oman. Washington now describes the strait as open and under American control.

The transit numbers say something more qualified. Against a normal baseline of roughly 85 vessels a day, 8 ships transited on 13 September and 12 on 16 September — of which 11 were running without AIS transponders. Several hundred vessels are holding position in and around the Gulf rather than attempting passage.

The strait is open for oil. For cargo, it is not open at all. That distinction is the whole story, and it is why a headline about crude tells a trader almost nothing about their own book.

The oil corridor is not the trade corridor

Escorted convoys are moving crude. Qatar, the world's second-largest LNG exporter, has shipped negligible volumes since the war started. And the cargo that is not oil or gas — the ores, concentrates, fertilizer feedstocks, industrial minerals and consumer goods that make a port economy work — has largely stopped.

The reason is freight economics rather than policy. War-risk premiums rose from about 0.125% of hull value per transit to 0.2–0.4%, roughly a quarter of a million dollars extra for a VLCC. A crude tanker earning up to $1 million a day on Middle East routes can absorb that and still sail. A Supramax on a sulphur cargo earning tens of thousands cannot. The insurance is priced per voyage on hull value; the freight is priced per tonne on a commodity with a thin margin. The two do not meet.

What actually stopped: the tonnage

Kpler's figures for volumes moving through the strait, comparing January 2026 with August 2026, are the clearest picture available of which trades died:

Limestone going to exactly zero is the one to sit with. It is a low-value, high-volume industrial mineral — cement, steel flux, desulphurisation — and it is the first thing to become uneconomic when freight and insurance rise. When the cheap tonnes stop, the plants that consume them stop too, and that is a slower and more damaging failure than an oil price spike.

Container trade has effectively ceased

From 1 March to 7 September 2026, 240 container ships reached Gulf ports, against 4,198 in the same period a year earlier — a fall of 94%, according to Xeneta. Before the crisis, 99 container services operated into or through the Gulf, around a tenth of the global container fleet. Eleven remain. Ten of those shuttle between ports inside the Gulf; the eleventh runs Iran–China.

For an importer, that reads as follows: a 40ft container from China to the UAE that cost about $1,250 has been quoted up to $10,000. Marine cargo insurance has gone from roughly $120 a container to $1,000. Transit time has doubled to around 60 days, with boxes frequently sitting at Mundra or Colombo waiting for onward space.

The fertilizer consequence is global

This is where a regional chokepoint becomes everyone's problem. Gulf economies supplied 24.8% of global nitrogenous fertilizer exports and 11.4% of phosphatic exports in 2024, per WTO data. Outbound fertilizer shipments through Hormuz to destinations beyond the Gulf went to near zero from early March and have stayed there, stranding an estimated 3–4 million tonnes a month.

Urea more than doubling and then giving most of it back inside two months is not a supply curve; it is a market with no price discovery. The exposure is concentrated in countries with no alternative: India sourced close to two-thirds of its nitrogen fertilizer imports from the Gulf, Thailand around half, and the WTO flags eighteen economies as particularly vulnerable, most of them in Africa and South Asia. A fertilizer price shock in March shows up as a yield problem a season later.

What the workarounds cost

Jebel Ali is the structural problem. It sits inside the strait, handled about 40,000 TEU a day before the war, and was the ninth-busiest container port in the world. It has 27 berths and 120 quay cranes. With Hormuz shut, it is a world-class port on the wrong side of a closed door.

The substitute is Khor Fakkan, on the Gulf of Oman side: 6 berths and 18 cranes. It is being asked to do a job several times its size, and it cannot.

So cargo goes overland. The pattern that has emerged for Qatar, Bahrain and Kuwait — all inside the cul-de-sac — is to land boxes on the Red Sea or Omani coast and truck them across. Maersk has described serving Qatar by discharging at Jeddah, trucking to Dammam and re-loading for the short sea leg. Hapag-Lloyd puts the land bridge at 7–10 additional days and says the Gulf crisis is costing it around $50 million a week. Oman has been the beneficiary: port volumes up 69% this year and transit truck traffic nearly tripled to over 116,000 movements.

The arithmetic of substitution

It is worth being precise about why trucks and aircraft cannot replace ships, because the gap is not marginal. DHL Global Forwarding's Middle East and Africa chief executive has put it in round numbers: a single 20,000-TEU vessel is equivalent to about 10,000 truck movements. A Boeing 777 freighter carries roughly 100 tonnes — about five 20ft containers — so replacing that same ship by air would take on the order of 4,000 flights.

That is the whole answer to "why not just fly it in". Air and road handle priority items and perishables. They do not handle 1.45 million tonnes of sulphur.

And the second-order effects

Slower, hotter, less controlled routes damage cargo. Frozen and chilled goods arrive with shelf life consumed. Bagged fertilizer and sulphur sitting at a transhipment port in Gulf summer humidity cake and degrade. Gulf governments are subsidising to hold local prices, which Capital Economics notes is a fiscal cost landing precisely when Qatar, Kuwait and Bahrain are taking a revenue hit. And the Houthis tightening control of Bab al-Mandeb this month narrows the Red Sea alternative that some of the land-bridge routing depends on.

What is being built

DP World is planning two new terminals at Fujairah, outside the strait, with roughly half of Jebel Ali's general cargo capacity. They will take about two years. That is the correct structural answer and it is no help to a cargo that needs to move this quarter.

What this means for your contracts

This is the part that decides who actually absorbs the loss, and it gets almost no coverage. A closed chokepoint is a commercial event long before it is a geopolitical one.

• The Incoterm decides whose problem this is. On FOB, risk and cost pass at the load port rail — the buyer owns the freight market, the war-risk premium and the delay. On CFR or CIF, the seller has contracted the carriage, and a tenfold move in freight lands on the seller unless the contract says otherwise. Anyone who sold CIF Jebel Ali on pre-war freight assumptions has been writing cheques all year.
• War risk is usually the buyer's account — check. Standard clauses put additional war-risk and blocking-and-trapping premiums for the buyer's account on CFR/CIF terms, but only if the clause is there. Silence means a fight.
• Laycan and demurrage are where the money leaks. A vessel waiting weeks outside the strait accrues demurrage against someone. Laycans agreed on normal transit assumptions are now routinely unachievable, and a narrow laycan with no extension mechanism converts a routing problem into a cargo rejection.
• Force majeure is narrower than people assume. Closure of a specific waterway is not automatically force majeure; many clauses require performance to be impossible rather than uneconomic, and an available-but-ruinous alternative route usually defeats the claim. If a named route or port matters to you, name it in the clause.
• Letters of credit expire on the old timetable. An LC drawn for a 25-day voyage does not survive a 60-day one. Presentation periods, latest shipment dates and expiry all need re-cutting before the cargo sails, not after — and every amendment costs time and bank fees.
• Nominate the discharge port carefully. "Jebel Ali" written into a contract today is a commitment to a port that may not be reachable. A clause permitting a nominated alternative — Khor Fakkan, Fujairah, Sohar — with an agreed cost-sharing formula is worth more than a price concession.

How we are trading through it

CommoFlow originates across the Middle East, Central Asia, the Caucasus, Africa and Australia, and contracts as principal with both sides. In practice, this year that has meant three things: pricing the delivered basis honestly rather than quoting pre-war freight and hoping; routing Central Asian material by rail and the trans-Caspian corridor where the sea leg no longer works; and writing the war-risk, laycan and alternative-discharge terms into the contract at the start instead of arguing about them at the berth.

None of that is clever. It is just the difference between a cargo that arrives and a claim that does not settle.

Frequently asked questions

Sources

Volume data through the strait from Kpler; container service and vessel-call data from Xeneta; port capacity from Lloyd's List; fertilizer export shares and price series from the WTO; fiscal commentary from Capital Economics and Oxford Economics Middle East; carrier cost and routing detail from Maersk, Hapag-Lloyd and DHL Global Forwarding, as reported by the Financial Times, 20 September 2026. Transit counts and war-risk pricing from maritime tracking and market reporting to 19 September 2026.

Figures move quickly in a live disruption. Everything here is dated; check current freight, insurance and index levels before pricing a cargo against it.