The gradual increase in ship traffic through the Strait of Hormuz, driven by the US-Iran agreement, is leading to a noticeable easing in the spot market. This normalization is described as "not a sharp collapse but rather a gradual and fluctuating normalization," according to Bilgehan Engin, president of the Turkish Forwarding and Logistics Association (UTIKAD).
Agreement Details and Initial Impact
The memorandum between the US and Iran, signed on June 14 and entering into force four days later, has eased tensions in the Middle East, prompting a gradual normalization of transit through the Strait of Hormuz. The fragile agreement raised questions about the conditions for reopening the vital waterway to commercial shipping.
Shipments through the strait have picked up pace as the tensions that had paralyzed the logistics sector since late February subsided. Uncertainty in global supply chains and high risk premiums are expected to decline.
Pre-War Traffic and Current Levels
Before the conflict, approximately 130 commercial vessels transited the Strait of Hormuz daily. Traffic came to a standstill after February 28, when the US and Israel launched joint pre-emptive strikes on Iran, followed by Iranian retaliation. Currently, traffic remains 70 percent below pre-war levels, despite a noticeable uptick after the deal came into force.
Freight Rates and Insurance Costs
Engin noted that surging freight rates, insurance costs, and risk premiums have influenced the global maritime transport market throughout the year, with spot freight rates for tankers and containers reaching historic highs. "While insurance costs are falling, freight rates aren’t declining at the same pace due to the persistence of structural cost factors," he said. The risk premium has not disappeared but has been repriced within a lower range, suggesting the bottom level in the spot market will be significantly above pre-crisis levels.
Contract Adjustments
Shipowners and major logistics firms are revising high-priced long-term contracts signed during the crisis, moving toward index-linked and flexible structures open to renegotiation. "In fixed-price contracts, sudden changes are limited due to the legal framework, but new-term contracts are shifting to a lower risk premium and a more balanced pricing structure," Engin explained. The sector is adopting a cautious medium-term stance despite short-term spot declines.
Rerouting and Market Dynamics
During the crisis, rerouting around the Cape of Good Hope artificially increased ton-mile demand, causing a temporary capacity crunch. Engin stated that the reversal of this rerouting will not lead to a severe supply shock but rather a gradual easing in the spot market and more competitive pricing with narrowing margins. "In the long term, the market will look for a new balance, establishing a new price floor dependent on demand growth and fleet discipline," he said.
Port Operations and Recovery
Heightened risks around the Strait of Hormuz pressured port operations along the Persian Gulf and Red Sea routes. Some ports partially lost their function as transit hubs, and transshipments via alternative routes increased costs and transit times. "These ports, through the normalization process, are expected to reintegrate into mainstream trade routes. Gulf ports especially will enter a phase of rapid recovery in energy exports and Asia-bound container flows, but the persistence of security concerns in the Red Sea may lead to a more gradual recovery," Engin noted.
Long-Term Structural Changes
Near-shoring and multimodal corridors have evolved from temporary solutions into strategic diversification tools. Major firms are moving toward hybrid models incorporating rail, short-sea shipping, and regional distribution centers on the Asia-Europe route as a permanent feature. Engin added that while the return to stability in the Strait of Hormuz may make traditional maritime routes appealing again, alternative corridors will not be eradicated. Global supply chain management now relies on cost optimization, risk diversification, and supply security in the aftermath of the crisis.
