Middle East Shipping Rates July 2026: Hormuz Crisis 4-Month Update
The SCFI Persian Gulf route index stood at $4,292/TEU as of July 3, 2026 , down 4.35% week-on-week, marking the first sustained decline since the Hormuz crisis erupted in late February. But don't be fooled by the dip: current all-in rates from China to Jebel Ali remain at $4,500-$5,000 for a 20ft container and $5,500-$6,000 for a 40ft, including war risk surcharges and emergency conflict surcharges. That's still 3-4 times pre-crisis levels.
What's Happening Now: "Volatile Managed Reopening"
Four months into the crisis, the Hormuz Strait is in what maritime security analysts call a "volatile managed reopening" , a far cry from normal operations.
Here's the timeline you need to know:
February 28: IRGC declared the strait closed. Vessel traffic plummeted 81% within 24 hours.
March-April: Major carriers (Maersk, MSC, CMA CGM, Hapag-Lloyd, OOCL) suspended or severely restricted Persian Gulf bookings. All cargo rerouted via Khorfakkan, Salalah, Jeddah, and Sohar.
June 17: The Islamabad Memorandum was signed , Iran agreed to "instantly" reopen Hormuz; US agreed to lift naval blockade. Oil prices dropped 11% the same day.
June 20: Iran closed the strait again, citing Israeli actions as agreement violations.
June 25: 31 confirmed transits (+48% day-on-day) , first sign of "functional commercial normalcy."
June 27: Oil tanker Kiku struck by Iranian attack drone. US conducted retaliatory airstrikes.
July 1: Situation remains volatile. Daily transits hover around 30-40 vessels, versus the pre-crisis average of 95-138, as reported by Xinhua News Agency and Shanghai Shipping Exchange (SCFI) data.
Bottom line: The strait has moved from full blockade to limited, unpredictable transit , not to normal operations. Carriers continue to route via Khorfakkan with transshipment to Jebel Ali, adding 7-14 days to transit times.
Current Freight Rate Breakdown (China → Jebel Ali, July 2026)
| Cost Component | Amount (USD) | Notes |
|---|---|---|
| Base ocean freight (Shekou → Jebel Ali) | $1,500-$1,600 / 20ft | Spot rate, excl. surcharges |
| Base ocean freight (Qingdao → Dubai) | $2,000 / 20ft, $2,200 / 40ft | Northern China origin |
| War Risk Surcharge (WRS) | $1,500-$4,000 / container | All carriers; varies by underwriter |
| Emergency Conflict Surcharge (ECS) | $2,000 / 20ft, $3,000 / 40ft | CMA CGM, MSC |
| Bunker Adjustment Factor (BAF) | Built into rate | VLSFO at $856/tonne, up 68% from pre-crisis |
| All-in estimated cost | $4,500-$5,000 / 20ft, $5,500-$6,000 / 40ft | From northern China ports |
SCFI Persian Gulf route: $4,292/TEU (July 3, down 4.35% WoW) , first meaningful decline since crisis began.
Why Rates Are Declining (But Only Slightly)
Three factors are pulling rates down from their peak:
More vessels entering the trade. Several carriers have added ships to Middle East routes in recent weeks, increasing available capacity. COSCO maintains "port-by-port phased acceptance" with Jebel Ali local cargo remaining stable.
Islamabad Memorandum signaled de-escalation. The June 17 agreement, despite its rocky implementation, gave markets confidence that the worst may be over. War risk insurance rates, while still elevated at 15-20% of hull value (vs. normal 0.02-0.05%), have stopped rising, according to carrier rate announcements and maritime security reports from Lloyd's List Intelligence.
Bunker costs stabilizing. VLSFO at $856/tonne has plateaued after surging 68% from mid-February, according to Ship & Bunker global fuel price indices. The expected July 1 bunker adjustment was partially pulled forward into June, reducing upward pressure.
Why Rates Aren't Dropping Further
Four hard realities keep Middle East rates elevated:
Hormuz is NOT reopened. Daily transits of 30-40 vessels are less than one-third of the pre-crisis average. Normalization requires 60+ vessels/day for two consecutive weeks , a threshold nowhere near being met.
Khorfakkan transshipment adds cost and time. Every container bound for Jebel Ali, Dammam, Hamad, Shuwaikh, or Bahrain must be transshipped at Khorfakkan or Salalah, adding $300-$500 per container in handling fees and 7-14 days in transit time.
War risk insurance remains expensive. Six P&I clubs have withdrawn Persian Gulf cover entirely, according to maritime security reports cited by Xinhua News Agency. New underwriting is concentrated among a few large reinsurers, and the US government's $20 billion reinsurance program is still ramping up. Expect 2-3 months of sustained stability before premiums return to normal.
Carrier scheduling remains disrupted. Maersk, MSC, and Hapag-Lloyd continue to suspend or strictly limit new Hormuz bookings. CMA CGM is the only major carrier partially resuming service , and only via its multimodal landbridge corridors (Khorfakkan → Jebel Ali → feeder to Saudi/Qatar/Bahrain/Kuwait/Iraq).
Transit Time Reality Check
| Routing | Normal Transit | Current Transit | Added Days |
|---|---|---|---|
| China → Jebel Ali (direct, pre-crisis) | 18-22 days | N/A (suspended) | , |
| China → Khorfakkan → Jebel Ali (transshipment) | , | 30-40 days | +12-18 days |
| China → Salalah → Jebel Ali (transshipment) | , | 35-45 days | +17-23 days |
| China → Jeddah → Dammam (overland) | , | 35-40 days | +17-18 days |
Practical advice: Add a mandatory 21-day buffer to all current sea freight estimates for Middle East destinations.
Outlook: Three Scenarios for August-October
| Scenario | Likelihood | What It Means for Rates |
|---|---|---|
| A: Managed reopening progresses | Most likely | Daily transits recover to 40-60 in late July; demining takes 4-6 months; rates/surcharges decline slowly; normalization by October-November |
| B: Implementation collapses | Moderate risk | Strait re-closes; rates surge back to March peak levels ($6,000+/20ft all-in) |
| C: Rapid recovery | Low probability | Demining progresses faster; carriers resume normal booking; rates could drop 30-40% by September |
Our assessment: Scenario A is the baseline. Expect a slow grind downward , perhaps 5-10% monthly decline in all-in rates , but don't plan for pre-crisis pricing until Q4 2026 at the earliest.
Key Date to Watch: July 15
July 15 is the critical decision point. If daily transit volume reaches 60+ vessels for two consecutive weeks with no new incidents, carriers may begin re-evaluating diversion necessity for August cargo. If not, expect current routing and pricing to persist through August.
Shipper Action Items
Lock in space and rates early , at least 3-4 weeks before planned sailing
Budget for $4,500-$6,000 all-in per container through August
Maintain multi-carrier backups , at least 2-3 carrier quotes per shipment
Specify surcharge terms in contracts , who pays WRS, ECS, BAF, and what caps apply
Qingdao port: why ship Middle East cargo from here
Qingdao Port is one of China's top three ports for dangerous goods handling, making it the preferred departure point for DG cargo (classes 2-9) bound for the Middle East. Our headquarters is located 5km from Qingdao Qianwan Container Terminal, giving us direct terminal access for expedited loading and real-time vessel coordination.
The Qingdao to Jebel Ali direct route typically takes 18-22 days under normal conditions (pre-crisis). During the current Hormuz situation, we route via Khorfakkan with transshipment, adding approximately 12-18 days to transit times. For shippers in Shandong, Hebei, and Henan provinces, Qingdao departures save $200-$400 per container on domestic trucking costs compared to routing through Shanghai or Shenzhen.
We maintain direct carrier relationships with MSK, HPL, MSC, COSCO, HMM, OOCL, EMC, YML, and CMA CGM at Qingdao Port. For DG cargo, our team handles the full DG packaging certificate (Dangerous Goods Packaging Certificate) process and maritime DG declaration with Qingdao customs. Learn more about our DG freight services.
Related trade lanes
- China to UAE freight forwarding , FCL/LCL rates to Jebel Ali, Abu Dhabi, Sharjah
- China to Saudi Arabia freight forwarding , Dammam, Jeddah, Riyadh routes
- China to Qatar freight forwarding , Hamad Port, Doha logistics
- Global Shipping Rates Market Report July 2026 , SCFI composite at 3,326.87, all major trade lanes