How the Iran–Israel War Is Disrupting Global Supply Chains in 2026

The Iran-Israel war – particularly the bombings that occurred towards the end of February 2026 – have shaken the world’s economy. From restricted seaways to halted shipments, companies big and small are getting hit hard. Are you an importer or exporter? The impact of this situation is already being felt in your bottom line.

This is all you need to know – and how you can protect yourself.

1. What Happened and Why It Matters

Following the strikes that took place in late February 2026, two of the most important chokepoints in the maritime industry – the Strait of Hormuz and the Red Sea/Suez Canal region – are practically unusable for shipping operations. As a consequence, ships are taking longer routes through the Cape of Good Hope, which delays Asia-to-Europe/Asia-to-US routes by around 10 to 15 days.

Gulf airport hubs (Dubai, Doha, Abu Dhabi) have closed or operate under severe restrictions. Gulf airlines Emirates SkyCargo and Qatar Airways provide up to 13% of total global air cargo capacity. The majority of their capacity is currently unavailable to shippers.

In other words, the cost of airfreight services has increased dramatically, insurance fees have skyrocketed, and shippers are struggling to adjust to the new situation.

2. Maritime Shipping: Longer Routes, Higher Costs

Key Chokepoints Are Closed

Iran’s threats have succeeded in stopping all commercial traffic in the Strait of Hormuz. The Suez Canal is running at an extremely low level. Large companies such as Maersk and CMA CGM have stopped making bookings for the Gulf ports in Oman and the UAE.

There are now more than 100 container vessels that have either been stranded or have changed their destinations.

What This Means for Freight Rates

The detour route will take an extra 10-14 days of travel time and a 10% cut in the effective carrying capacity of each vessel used in the transoceanic trade network:

Spot prices in the Asia-Dubai trade corridor have risen from $1,800/FEU to over $4,000/FEU

A special $3,000/FEU charge has been announced for Gulf-bound cargo by CMA CGM

Bunker fuel prices rose to more than double their levels – from approximately $490/ton in February to above $1,120/ton by March 2026

In conclusion, it is expected that shipping costs from/to Middle Eastern ports will be marked up by 20-30%.

3. Air Cargo: Capacity Down, Prices Up

Gulf Hubs Are Out of Commission

The airstrikes that followed the attacks launched by the US and Israel caused the grounding of flights between and to Dubai, Doha, Abu Dhabi, and Bahrain. The Gulf airlines, which account for 13% of the total cargo capacity in the world, are either grounded or restricted from flying.

They fly overland or directly from Asia to Europe, thereby burning up more fuel than ever before.

How Much More Will Air Freight Cost?

Analysts from the industry are issuing warnings of "double or triple" fare hikes on routes which regularly pass through the Middle East region. The China-Europe route fare has increased by 7-10% in early March 2026. Jet fuel costs are heading into $100 a barrel level, and airline companies are directly passing on their costs to consumers.

All businesses using air cargo for their medicines, electronics, and rapidly moving e-commerce items should plan for big fare hikes, right now.

4. Land Transport and Last-Mile Delivery

Even those that do not have international shipping operations are beginning to feel the consequences.

Fuel and diesel prices in the United States increased by 30-60% within several weeks after the situation became worse. In terms of trucking services, this means an increase in operational costs, which will be paid for by the shippers.

Small businesses are especially vulnerable because of their small budget. The owner of one such company noticed the price hike by approximately $2 per gallon.

In addition, the US government announced the suspension of the Jones Act for 60 days, which will allow foreign cargo ships to transport items across the USA.

Fulfillment centers face problems when there is not enough stock because of the lack of time for transportation. Two-week delays in shipment mean that there might not be any inventory left.

5. Insurance and Freight Rate Surge

War-Risk Insurance Has Skyrocketed

War coverage premium for tankers in the Gulf increased from around 0.25% to 3% of the vessel's cost. It means that an additional $7-$9 million must be paid per large tanker, which previously paid only $600,000 for such insurance. Cargo war-risk premium for dry bulk carriers in the Gulf is around 1%-1.5% of the vessel's cost.

In practical terms, cargo owners will face higher "war surcharges," particularly on shipments involving the Persian Gulf.

A Market Under Pressure

Whereas many key international rates showed overall stability in early March 2026 (to some extent due to Chinese New Year softness), the long-term trend is evident: upward. Contract and spot rates are expected to be under consistent upward pressure during the latter part of 2026, especially in terms of petroleum, chemicals, and bulk cargo.

Shippers should budget for 10–30% higher freight and fuel costs in 2026 compared to early 2024 on critical lanes.

6. Impact by Business Size

Small Businesses: Highest Risk

The smaller companies are suffering the most. They have little margin for error and few financial resources to withstand:

• High costs of raw materials (fuels, transportation, insurance fees)

• Cancelled shipments and stranded freight

• Loss of customers if they are not able to cover or explain higher prices

An example that comes up often is $5 million worth of pistachios exported from Iran that remain stranded at sea and cannot be delivered to their destination.

Mid-Size Businesses: Disrupted but Resilient

Smaller companies may not be able to diversify their supply chains; however, larger firms have many resources available to them, including credit facilities, inventories, and other sources of suppliers, but are still not safe from being affected by the shortages. Network diversification is the first thing that must be done by the latter group.

Large Enterprises: Strategic Adaptation

Big businesses are capable of enduring cost implications and capitalizing on economies of scale to ensure that they get hold of precious shipping slots. Nevertheless, they will have to contend with higher insurance premiums and schedule uncertainties. Big businesses will have to consider whether they should nearshore their logistics networks.

7. How to Protect Your Supply Chain: 7 Actionable Steps

1. Ensure route and carrier diversification as soon as possible. Do not depend on only one route of transportation or one carrier, because other alternative routes exist as well: around Africa, Panama, or Europe, among others.

   
   

2. Ensure safety stock for your most crucial goods. Considering that the Asia-United States routes are being delayed by two weeks or even more, it would be wise to have an extra 10-20% of inventory as a buffer.

   
   

3. Check your cargo insurance. Make sure that your insurance policy covers the war risk areas mentioned. In addition, many policies do not cover such risks, and the premiums for adding this risk have increased drastically.

   
   

4. Consider including war risk surcharges in all freight contracts. The contracts signed before February 2026 probably did not take into consideration the current situation and need to be adjusted immediately.

   
   

5. Proactively communicate with customers. Simply notifying them about the situation and explaining, “We’re facing increased costs due to rising fuel and transportation expenses; this is how it affects your shipment,” can help create a much better impression than imposing hidden fees and unexpected delays.

   
   

6. Consider new sourcing options. If you typically source supplies via Middle Eastern routes, start exploring alternative suppliers from Southeast Asia, Latin America, or elsewhere where the distance is significantly smaller. Establishing these relationships requires some effort, and the sooner you do it, the better.

   
   

7. Partner with a responsive 3PL company. The ability of a quality 3PL to adapt and modify shipment routes based on changes in global conditions makes it more valuable in 2026 than ever before.

   
   

8. Short-Term vs. Long-Term Outlook (0–24 Months)

Short term (0 to 6 months): Volatility is expected. The normal course would be freight surcharges, delayed deliveries, congested ports, and costly insurance. Proactive companies that build buffer inventory, look at alternate carrier options, and consider insurance alternatives will handle this phase much better than reactive companies.

Medium term (6 to 18 months): In case the war continues, structural changes can be anticipated. Alternative routing either around Africa or through Panama will become a reality and cost structures will remain high. There could be some shifting of sourcing for products vulnerable to Middle Eastern bottlenecks.

Long Term (18 to 24 months): The world shipping route balance could be permanently altered. Higher use of Panama Canal, circumnavigation around Africa and the possible use of Arctic routes could become the norm. Proactive investment now in building supply chain resiliency will prove more structurally sound than waiting out the situation.

Final Thoughts

And the Iran-Israel conflict is much more than geopolitical tension, as this is truly a logistics disruption with significant financial implications for organizations of all sizes. The cost of freight has risen, as have insurance costs and transit times. And everything continues to be unpredictable.

Those who are prepared for success will take advantage of this opportunity to plan rather than simply suffer through the disruption. Be sure to diversify your logistics routes, stockpile your inventory, get appropriate insurance, and keep open lines of communication with your clients.

And don’t forget to make use of the tools available to you for dealing with the disruption.