Middle East Crisis Halts Air and Sea Traffic at Once, Raising Alarm Over Global Logistics and Oil Prices

[Financial News] Air and sea routes across the Middle East have been thrown into chaos as airstrikes by the United States and the State of Israel on Iran, and Iran’s retaliatory attacks, unfold in rapid succession. Fears are mounting over a global crisis in logistics and energy supplies. Thousands of flights have been canceled, stranding hundreds of thousands of passengers, while about 10% of the world’s container ships are reportedly waiting in the Strait of Hormuz.
According to reports on the 2nd (local time) from British Broadcasting Corporation (BBC), Associated Press (AP) and others, flights to and from major airports in the Middle East have been canceled on a large scale for a third straight day. Flight-tracking site Flightradar24 estimated that more than 4,000 flights a day have been canceled.
Aviation analytics firm Cirium stated that as of Monday morning, 79% of flights bound for the State of Qatar and 71% of flights to the United Arab Emirates (UAE) had been canceled. It added that 81% of flights to Israel and 92% of flights to the Kingdom of Bahrain were also suspended.
The State of Qatar closed its airspace, halting all takeoffs and landings in Doha, while Jordan announced a partial closure of its own airspace. After the RAF Akrotiri air base in Cyprus came under drone attack, flights to the Republic of Cyprus were also canceled.
In the UAE, some airlines have partially resumed operations. However, UAE authorities urged travelers to come to the airport only if they had been directly notified by their airline that their flight would operate, citing safety concerns.
Faye McCall, who was stranded in Abu Dhabi over the weekend before finally making it back to Heathrow Airport, said, "The airport was extremely chaotic and there were no announcements, so we had no idea what was going on," adding, "It was only after our scheduled boarding time had passed that sirens went off and our phones were flooded with text alerts about a possible missile attack."
There have also been cases of physical damage to airports. At Zayed International Airport in Abu Dhabi, debris from an intercepted drone fell, killing one person and injuring several others. Dubai International Airport sustained damage to some facilities, and four staff members were injured. The Guardian described the disruption as "the most severe aviation chaos since the COVID-19 pandemic."
Governments around the world have begun evacuating their citizens. Germany is working on plans to send charter flights to Saudi Arabia and the Sultanate of Oman to bring back thousands of tourists, while Italy and the Czech Republic have also deployed charter planes. The German Travel Association (DRV) said about 30,000 Germans have been affected by the crisis.
The problem now extends beyond the skies to the sea lanes.
Jeremy Nixon, chief executive officer of Ocean Network Express (ONE), the world’s sixth-largest container shipping line, told a shipping conference in Long Beach, the United States, that "of roughly 750 vessels waiting near the Strait of Hormuz, about 100 are container ships," and noted, "Around 10% of the global container ship fleet is currently there."
The Islamic Revolutionary Guard Corps (IRGC) has threatened to open fire on ships passing through the Strait of Hormuz, effectively closing the waterway. Major marine insurers have also halted coverage for war risks. In response, global carriers including Mediterranean Shipping Company (MSC) have suspended all bookings for cargo bound for the Middle East.
Nixon warned, "All that cargo will start piling up at major hub ports in Europe and Asia," adding, "This situation could trigger a massive spike in energy prices."
The Strait of Hormuz is a critical chokepoint through which about 20% of the world’s seaborne oil trade and vast volumes of Liquefied Natural Gas (LNG) pass. Analysts warn that a prolonged closure could send international oil prices soaring, fuel global inflation, and place a heavy burden on economies worldwide.
whywani@fnnews.com Hong Chae-wan Reporter