Global shipping giant Maersk announced on Friday that it was temporarily halting two key routes linking the Middle East and Gulf region with destinations in Europe and the Far East due to escalating conflict in Iran.
Key Takeaways
Maersk has temporarily halted two major shipping routes connecting the Middle East to Europe and Asia due to escalating conflict in Iran. This move follows threats from Tehran and ongoing hostilities that have disrupted global supply chains.
- Maersk suspends ME11 (Middle East-Europe) and FM1 (Far East-Middle East) services as a precautionary measure
- Ships will avoid the Strait of Hormuz, where 20% of global oil passes through
- At least 147 container ships are stranded in the Persian Gulf
- MSC implements an 'End of Voyage' declaration for cargo bound to the Gulf
The decision, described as a precautionary measure, follows an assessment of risks to shipping in the Gulf region. The FM1 service connecting the Far East to the Middle East and the ME11 service linking the Middle East to Europe have been suspended. Maersk's shuttle services within the Gulf are also on hold until further notice.
The suspensions ensure that Maersk's vessels avoid the Strait of Hormuz, a critical maritime corridor through which 20% of global oil passes. This decision comes amid threats by Tehran and ongoing hostilities in the region following strikes launched against Iran by the United States and Israel over the weekend.
Maersk's move adds to escalating supply chain disruptions caused by the conflict, with at least 147 container ships stranded on the wrong side of the Strait. The disruption has thrown schedules off balance, causing congestion at ports and sending freight rates higher.
Other major shipping lines, including MSC and CMA CGM, have also diverted routes away from the Suez Canal, opting for longer journeys around southern Africa due to security concerns. Shares in Maersk were trading 0.6% higher on the NASDAQ Copenhagen Exchange at $2,637 a share.
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