Hormuz closure triggers ‘havoc’ for project logistics supply chain

The near-total closure of the Strait of Hormuz amid the war in the Middle East will haunt global breakbulk and project markets long after the final missiles are fired, sector specialists say.

Speaking during a March 26 Journal of Commerce webcast, José Enrique Sevilla-Macip, senior research analyst for Latin America Country Risk at S&P Global Market Intelligence, said there had been a 97% decrease in transits across the Strait of Hormuz over the past 25 days, noting that on March 25, for the first time since the conflict began, not a single vessel crossed the waterway.

The paralysis is triggering a shift from initial price shocks to actual physical shortages of fuel and goods.

On the ground, the logistics of moving breakbulk and project cargo goods has become a balancing act of cancellations and rerouting. Marc Cowie, CEO for North America at project cargo forwarder Trans Global Projects (TGP), said that many carriers are refusing to even quote for cargo entering the war region due to skyrocketing insurance premiums.

The disruption is also creating a “lag impact” that will persist for months. “There will undoubtedly be ships out of position, cargo out of position, and there’s going to be a knock-on effect,” Cowie said on the webcast. “It’s going to take some time to get back to normality.”

For panelist Christian Ohlrich, global director for logistics at energy storage products manufacturer Fluence Energy, the crisis is manifesting most acutely in the energy sector. He described the “fuel shock” as a primary concern, with bunker supplies depleting rapidly, particularly in Asia. This has led to a chaotic environment for manufacturing and project execution.

“It’s creating quite some havoc,” Ohlrich said. “It’s crunching schedules. It’s increasing costs.”

He noted that while larger projects can still attract the necessary multipurpose vessels, smaller, less “enticing” shipments are being delayed by weeks.

That is not, however, stopping Fluence’s project operations.

“We have plenty of buffers,” Ohlrich said. “I’m still making all my commitments. It’s just changing the flow of project execution.” This includes changing internal team arrangements to meet the sequence of a project. “It’s an inconvenience rather than a hindrance,” he said.

Oil prices expected to remain elevated

The bunker fuel shortage is unlikely to ease in the short term. Sevilla-Macip expects oil prices to remain above $100 per barrel for at least the next month, although he holds out hope they could return to $60 by year-end if hostilities cease soon.

However, the path to peace is cluttered with “signposts” of further escalation, he said. These include potential Iranian attacks on US aircraft, the involvement of Tehran-backed Houthi militants in the Bab-el-Mandeb Strait, or the targeting of critical civilian infrastructure such as desalination plants.

In the face of this volatility, the advice from project shippers and forwarders is a mix of tactical flexibility and rigorous planning. TGP’s Cowie urged shippers to work in close partnership with forwarders to find alternative routes or modes, such as trucking cargo across the Arabian Peninsula to safer ports.

“We have to remain flexible, remain calm,” Cowie said. “Logistics is about challenges. It is about overcoming those challenges.”

Ohlrich echoed that, stressing the need for better foresight.

“Tighten up your planning and forecasting as much as possible,” he advised the webcast. “The better you can plan ahead, especially in situations where you see these kinds of disruptions, the better.”

This article was originally published in the Journal of Commerce on March 30, 2026.