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Iran- USA/Israel Conflict impact on bulk
Dry bulk trade through the Strait of Hormuz faces disruption, with the impact largely concentrated in minor bulk trades.
Executive Overview
The Strait of Hormuz is the most important waypoint for vessels destined for the Arabian Gulf, as the largest discharge ports are located on the western side. Given the current conflict in the region, many vessels currently inside the Gulf are unlikely to risk exiting in the near term, effectively limiting available tonnage.
Overall, given the small share of vessels relative to the total fleet, any impact on the dry bulk freight market is expected to be limited and primarily concentrated in smaller and mid-sized vessel segments.
Spotlight | Dry Bulk Vessels Inside the Strait of Hormuz
The Strait of Hormuz is a key waypoint for vessels destined for the largest dry bulk discharge ports in the Arabian Gulf. According to data from Signal Ocean, there are currently 324 bulk vessels located within the Strait of Hormuz region, with vessel sizes ranging from 5,000 DWT to over 183,000 DWT.
Around 51% of these vessels are currently laden, indicating that a significant share of tonnage is actively engaged in ongoing cargo movements. In terms of vessel size distribution, approximately 23% of vessels fall within the small bulker segment (below 25,000 DWT), highlighting the presence of smaller trading units in the region.
In addition, around 8% of the vessels operating in the area are linked to sanctioned entities, reflecting the continued presence of vessels associated with Iranian trade flows. Even before the recent escalation in the region, sanctions risks were already shaping Iranian-linked bulk trading. For example, in early 2026, an Iran-flagged vessel listed under U.S. sanctions records delivered a cargo of urea fertilizer to Brazil after loading in Asaluyeh, highlighting how Iranian fertilizer shipments have continued to move through international dry bulk routes despite existing sanctions.
Although more than 300 vessels are currently located inside the Strait of Hormuz and effectively removed from active trading, this represents a relatively small share of the global dry bulk fleet. The vessels account for roughly 2% of the total active fleet, although the share rises to around 3% of the Panamax fleet currently in service.
The Arabian Gulf is a growing destination for dry bulk demand, with dry bulk commodity flows to the area increasing by 9% in 2025 to reach 579mt, marking the third consecutive year of growth. The majority, 31% in 2025, originates from the Arabian Gulf as well, with the UAE, Oman, and Bahrain accounting for over 86% of all Arabian Gulf-to-Arabian Gulf dry bulk flows. On a global count of flows to the Arabian Gulf, the same countries account for over 27%.
Given that the majority and largest discharge points sit inside the Strait of Hormuz, dry bulk flows to the region are likely to come under significant pressure during the Iran–U.S./Israel conflict, as vessels avoid the chokepoint, war-risk insurance is withdrawn, and carriers suspend transits, even if some Gulf ports remain technically accessible. However, because the Arabian Gulf accounts for a relatively small share of global dry bulk trade, around 3% according to Signal Ocean, the impact on the wider dry bulk market or bulk commodity prices is expected to be limited unless the disruption at Hormuz becomes prolonged.
Takeway
The dry bulk sector remains significantly less exposed to disruptions than tanker or LNG shipping, which rely heavily on energy exports from the Gulf region. As a result, the impact on dry bulk freight rates is expected to remain limited unless disruptions become prolonged. Energy markets have nevertheless reacted to rising geopolitical tensions, with oil prices trending higher and signalling increased risk for the global shipping market.
Fertilizer trade has already begun to reflect these developments, as the Gulf region hosts some of the world’s largest fertilizer production hubs. Disruptions in the region are contributing to rising fertilizer prices, increasing the risk of higher agricultural input costs and potential food price inflation. In the event of a broader or prolonged escalation in the Middle East, fertilizer-related dry bulk trades could face additional pressure, particularly as global urea supplies were already relatively tight prior to the current tensions and geopolitical risks remain elevated.
All data, estimates, and projections presented herein are based on information available as of [March 5, 2026]. While every effort has been made to ensure accuracy, the analysis is subject to revision as additional information becomes available.
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
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Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
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