What are Potential Shipping Disruptions to Watch Due to the Israel-Gaza War?


It’s been almost a week since Israel was attacked by Hamas in a surprise attack. The attack brought parallels to the 1973 Yom Kippur War, when Israel went to war with Egypt and Syria over territorial disputes. Back then, that war, and others before it, resulted in some major impacts to shipping, both in the region and globally.

With history in mind, now is a good time to be prepared for potential shipping and trade disruptions. What could be disrupted in the world of shipping and what is likely safe from disruption?

The Strait of Hormuz (Likely to be Affected in a Wider Conflict)

The Strait of Hormuz, a strategic waterway in the Middle East, connects the Persian Gulf and the Gulf of Oman. In recent years, the Iranian government has used the strait as a bargaining chip in nuclear talks, and has attacked several oil vessels, as we previously reported.

With the Israel-Gaza war, it’s possible the Strait of Hormuz will again be affected as Iran seeks to stir up regional tensions and drive oil prices higher. Look for a potential disruption here if the war spills over into other countries in the region. The consequences would likely mean oil shortages and much higher oil prices for both shippers and consumers.

The Suez Canal (Unlikely to be Affected)

Though the Suez Canal was shut down during a 1956 war between Israel, Egypt, and Gaza, leading to the “Suez Crisis”, this war is very different. Israel and Egypt largely made peace in recent decades, and Egypt is playing peace-broker this time around. For these reasons, it is unlikely that the Suez Canal will be affected.

Oil Prices (Likely to be Affected)

Anytime there is a conflict in the Middle East region, oil prices are usually a topic of discussion. The reason is that both Iran and Saudi Arabia, two key players in the region, have vast control over the world’s oil supply.

Oil prices will be affected by the current Israel-Gaza War – that much is certain as reflected on global oil futures markets. However, the impact is unlikely to be as bad as during the breakout of the Ukraine-Russia War, since the United States has since stepped up its own oil production levels and may have set an all-time record yesterday, October 12, 2023, on the highest production levels ever.

The Mediterranean Sea (Unlikely to be Affected)

We expect that ships will be continuing to pass through the Mediterranean Sea during the current conflict without any issue. Barring the entry of other major players in the region, such as Egypt, Turkey, and Saudi Arabia, passage is protected due to these countries playing the role of peace-brokers and projecting stability during the current crisis. Any disruptions are much more likely to be felt in the Gulf of Oman, rather than in the Mediterranean Sea, at least for the foreseeable future.

One thing is for certain: the current conflict will affect shipping and trade, even if only in a limited fashion.

The real hazard for the world of shipping and trade is if a) the conflict drags out over a long period of time, or b) other regional countries get involved on a wide scale. A ground invasion of the Gaza Strip by Israel is unlikely in and of itself to widely impact shipping. We at More Than Shipping, and our parent company, MTS Logistics, will continue to keep our audience posted on future developments during these turbulent times.