If you have ordered anything online that travels through the Middle East, or if you fill a car with petrol, or if you buy pretty much anything that arrives in a shipping container, you now have a financial stake in what is unfolding in the Persian Gulf. The war between the United States, Israel, and Iran, which began with coordinated strikes on February 28, has effectively closed one of the planet's most important trade arteries. The consequences are moving fast toward Australian shores.
The crisis began on February 28, 2026, following joint military strikes by the United States and Israel on Iran. In response, Iran launched retaliatory missile and drone attacks on Israeli territory and US military bases in Gulf states, while its Islamic Revolutionary Guard Corps (IRGC) issued warnings prohibiting vessel passage through the Strait of Hormuz, leading to an effective halt in shipping traffic. President Trump has said the dispute could last four to five weeks. The human toll is already grim: the ongoing attacks and counterattacks have left more than 500 people, including six US servicemembers, dead.
The strait, a passage between Iran and Oman, facilitates the transit of around 20 million barrels of oil per day, representing roughly 20% of global seaborne oil trade, primarily from producers like Saudi Arabia, the United Arab Emirates, Iraq, and Qatar. It also handles approximately 22% of global liquefied natural gas exports, almost all of which originate in Qatar. In plain English, this means that when the strait sneezes, the global economy catches a cold.
The warnings and subsequent attacks on vessels caused a sharp decline in maritime transit, with tanker traffic dropping by approximately 70% and over 150 ships anchoring outside the strait to avoid risks. Approximately 170 containerships, with a combined capacity of around 450,000 TEUs, were inside the Strait of Hormuz or its immediate approaches at the time of the initial IRGC warnings, according to analysis by Hua Joo Tan, co-founder of Linerlytica. Many are now effectively trapped.
The response from the shipping industry has been swift. Hapag-Lloyd, Maersk, CMA CGM and MSC, among others, have issued formal suspensions of their transits. Maersk suspended all new ocean bookings between the Indian subcontinent and Upper Gulf markets including the UAE, Bahrain, Qatar, Iraq, and Kuwait. Flexport, the supply chain and shipping optimiser, says transit times between Asia and Europe, and on certain Asia to US East Coast lanes, will increase by 10 to 14 days as vessels detour around the Cape of Good Hope. Hapag-Lloyd has also introduced a war risk surcharge of $1,500 per standard twenty-foot container, and $3,500 for reefer or special cargo, on all bookings from March 2 onward.
The skies are no better than the seas. Air carriers in the region represent 13.6% of global capacity, according to Flexport. They are unable to operate the majority of their flights, and those disruptions extend beyond trade between Asia, the Middle East, and Europe. FedEx has suspended flights to and from Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, the United Arab Emirates, and Saudi Arabia until further notice. Other air cargo operators that have announced suspended or disrupted operations include Emirates Sky Cargo, Cathay Group, Qatar Airways, Etihad Airways, and Oman Air Cargo. Data from Netherlands-based consultancy Rotate shows global air cargo capacity is down 18% from the previous week.
Here's what this actually means for your hip pocket: oil markets have reacted immediately. On March 2, Brent crude jumped by 10% to more than $82 per barrel, while natural gas prices spiked by nearly 50% after QatarEnergy halted production following attacks on its facilities. Energy prices filter through to almost everything Australians buy, from fuel at the bowser to groceries and imported goods.
The Freight and Trade Alliance and the Australian Peak Shippers Association, representing logistics providers and cargo owners in Australia, said Sunday night that the situation is already having direct and measurable impacts on Australian supply chains, with disruptions to air cargo connectivity, container shipping schedules, and the rapid imposition of significant conflict-related surcharges by major international carriers. Shipping and freight sector executives in Australia have said they are concerned at the "speed, scale and timing" of surcharges being imposed by shipping companies on routes through the Middle East.
There is some qualified reassurance on the technology front. The war is causing an air and shipping jam, but analysts say it will likely have little effect on the global technology market unless the conflict widens significantly. "UAE is a major distribution hub for many products, including tech, in the region and since both airspace and likely port traffic are closed or limited, the local markets may face issues," Jitesh Ubrani, research manager with IDC, told The Register. "But globally these represent a small portion of the market."
The more sobering view comes from those watching the broader economic picture. "A prolonged closure of the Strait of Hormuz is a guaranteed global recession," warned Robert McNally, an energy analyst at Rapidan Energy Group. Insurance companies are cancelling coverage for the Strait of Hormuz, and Peter Sand, chief analyst at freight pricing platform Xeneta, says the repercussions of the joint military operation will lead to "the further weaponisation of trade and shatter hopes of a large-scale return of container shipping to the Red Sea in 2026." Carriers had been cautiously returning some services to the Suez Canal route; those plans are now shelved indefinitely.
There is a legitimate case that the strikes were a calculated attempt to resolve the long-running threat posed by Iran's nuclear programme, and that market disruption is the short-term price of long-term regional security. Defenders of the operation argue that a nuclear-armed Iran represents a far greater systemic risk to global stability, including trade, than any temporary shipping disruption. That is a serious argument, not a trivial one.
The counterpoint, of course, is that the collateral damage to global commerce is falling hardest on countries, workers, and businesses that had no say in the decision. "The speed and scope of escalation in the Middle East will have taken many businesses by surprise and has highlighted just how unstable the region can become in as little as 48 hours," says Simon Geale, EVP at Proxima. The semiconductor shortage of 2021 began as a 12-week problem and lasted two years. The Red Sea disruptions that emerged from Houthi activity in late 2023 were still constraining service patterns in early 2026. History suggests that supply chain shocks declared temporary rarely stay that way.
The honest answer on duration is that nobody knows for certain. US President Trump's four-to-five-week estimate is one data point; market analysts and shipping executives are hedging for something longer. The longer the disruption persists, the more significant and structural the economic damage will become. For now, the most prudent stance, for businesses and consumers alike, is to plan for elevated costs and extended delays, and to watch carefully whether the conflict stays contained or finds a way to spread further across the region.