Commercial shipping through the Strait of Hormuz has effectively shut down in the days since the US and Israeli strikes on Iran began on February 28, threatening to deliver the automotive industry’s most severe logistics shock since the pandemic.
The strait — almost 100 miles long and just 21 miles wide at its narrowest point, with shipping lanes of only two miles in each direction — connects the Persian Gulf to the Indian Ocean.
On Monday, Iranian Brigadier General Ebrahim Jabbari, an adviser to the Islamic Revolutionary Guard Corps, declared the strait closed and vowed that any ship attempting to pass through would be set on fire.
Iran has not formally declared a blockade under international law, but it has reportedly attacked at least three tankers near the strait, killed one crew member, and the scheduled withdrawal of protection and indemnity insurance from March 5 has made the closure operationally complete for all but a handful of sanctioned vessels.
Last Sunday, transits of all vessel types had already fallen 81% compared with the previous Sunday, according to Lloyd’s List — with just over 1 million deadweight tons of traffic recorded versus a January average of 10.3 million.
Of the 23 transits recorded that day, just one was a crude oil tanker.
Transit Suspended
The world’s four largest container shipping lines — Maersk A/S, Mediterranean Shipping Co., CMA CGM SA and Hapag-Lloyd AG — have all halted transits through the Strait of Hormuz, effectively severing the Gulf from global container networks.
China’s COSCO Shipping Holdings Co. and Emirates SkyCargo also suspended bookings through the region.
Maersk additionally paused future Trans-Suez sailings through the Bab el-Mandeb Strait, rerouting services around the Cape of Good Hope, and suspended reefer and dangerous cargo acceptance in and out of the UAE, Oman, Iraq, Kuwait, Qatar, Bahrain and Saudi Arabia.
“Due to the escalation of security risks in the Middle East region and the effective closure of the Strait of Hormuz, vessels are currently unable to safely transit the area,” Maersk stated.
“As a result, service flows across the Middle East corridors have been significantly disrupted,” the logistics giant added in a website note updated earlier on Tuesday.
Alternative
Diversions around the Cape of Good Hope reportedly add approximately 3,500 nautical miles and roughly $1 million in fuel costs per voyage, with costs expected to be passed on to consumers.
Rerouting via the Cape of Good Hope adds approximately 10 to 14 days to transit times between Asia and Europe or the Americas, according to Automotive Logistics.
Auto Impact
The automotive sector faces a cascade of disruptions across energy costs, raw materials and component logistics that industry analysts say could take months to unwind.
Assembly plants in Germany, the UK, the US and Mexico could begin to feel the effects of delayed Asian component shipments within two to three weeks of any sustained closure, according to the outlet Automotive Logistics.
David Whiston, an equity analyst at Morningstar, told Automotive News that the disruption would compound the industry’s existing affordability crisis. “That just adds more inflation to making a vehicle, which is already battling tariff costs,” he said.
But the industry’s exposure to Asia-Europe sea lanes for semiconductors, battery materials and electronics remains significant.
EV batteries and semiconductors destined for 2026 production are reportedly stranded in the Gulf, according to Supply Chain Digital.
Sales Impacted
Chinese automakers face the most direct sales exposure to the conflict, according to a research note sent by Bernstein earlier on Tuesday.
Chery Automobile Co. — which is preparing to expand to Canada — derives 12% of its global sales from the Middle East, followed by SAIC Motor Corp. at 11% and Great Wall Motor Co. at 6%.
The consultancy said vehicle shipments and sales across the region are expected to be disrupted as the conflict continues.
On the supply chain side, the US EV maker Rivian said on Tuesday that it is still “too soon” to evaluate the impact.
Rivian‘s Chief Financial Officer Claire McDonough, speaking at the J.P. Morgan 2026 Global Leveraged Finance Conference on Tuesday, said the company is monitoring the situation closely but that it is too soon to gauge the full extent of the damage.
“I think it’s still too early to fully assess the impacts on the global supply chain,” McDonough said.
“Something we always carefully watch. Always monitoring for potential shocks that could impact our broader supply base or bring inflation to some of our pricing as well. But still too early at this point to say, obviously, the news is just a few days old,” McDonough added.
