Shipping disruption from Middle East crisis reaches ports in Asia, including Singapore

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SINGAPORE - Merchant vessels, including oil tankers and cargo ships, have started to queue up at ports across Asia, including Singapore, as the effective closure of the Persian Gulf throws the global shipping network into disarray.

Data provided to The Straits Times shows longer queues and delays at major Asian ports, with experts warning that more vessels carrying Gulf-bound cargoes could seek anchorage in Singapore and Malaysia’s Tanjung Pelepas and Klang ports in the coming weeks if the crisis drags on.

This comes as the critical Strait of Hormuz – which connects the Persian Gulf with the Indian Ocean – remains effectively closed, bringing to a near halt the transit of hundreds of vessels per day, including container, dry bulk and liquid cargo ships.

While a trickle of ships has made its way in or out of the Gulf so far in March, a growing number of vessels bound for Gulf ports have chosen to anchor, mostly at trans-shipment ports like Singapore, fearing for the safety of their crew and assets.

It takes about five to seven weeks for ships to travel from the Gulf region to Singapore, depending on the size and type of vessel.

With the war in its fourth week, analysts said these are just early days of a backlog jam building up at ports in South-east Asia.

Portcast, a Singapore-based supply-chain intelligence platform, said as the shipping disruption situation evolves and vessels reroute to avoid uncertainty, the effects are showing up at ports across Asia in the form of longer queues, slower berth access and more delays.

“The data from Portcast (for major Asian ports) over the past few weeks shows that congestion is building,” said Portcast chief executive and founder Nidhi Gupta.

She said the disruption has been significant enough to alter vessel behaviour at scale. “Ships are holding, rerouting, or bunching at alternative ports while operators wait for clarity.”

The seven-day average number of vessels waiting at anchorage in Singapore has risen to 30.3 as at March 25, compared with 20 before Feb 28, when the conflict started.

Anchorage refers to a designated, safe and usually charted area of water where ships drop anchor to wait for a berth, harbour pilot or permission to enter port.

The worst-hit ports include Busan in South Korea, where the average reached 12.9 versus 5.4 before Feb 28, data from Portcast showed.

While the Gulf region is known for oil and gas exports, it also accounts for about 13 per cent of global seaborne trade volume for chemicals, including fertilisers, 3 per cent containers, and 2 per cent dry bulk cargo.

The UN Conference on Trade and Development (UNCTAD) said that just a day before the conflict started, 141 ships transited the Hormuz, with more than 80 per cent headed to Asian ports and the rest to Europe and other regions.

According to Lloyd’s List Intelligence, a London-based real-time vessel tracking firm, at least 18 ships in the Gulf region have sustained direct hits, and another five were slightly damaged or narrowly avoided a projectile fired at them, since March 1.

Hence, the firm estimates only 105 ships have passed through the strait between Feb 28 and March 18, compared with 1,900 in the same period of 2025.

Shippers are also facing prohibitively higher insurance costs for journeys into the Gulf region.

The war-risk premium, which typically was set at 0.25 per cent of a ship’s value – or US$250,000 (S$320,800) per voyage for a US$100 million ship – now costs US$1 million, a 300 per cent increase, UNCTAD said.

If congestion at ports continues to build up, the cost of shipping will also rise and hurt shippers.

The cost of marine fuel, or bunker, has also risen, with both high-sulphur and low-sulphur fuel oil prices doubling between Feb 27 and March 9.

Trading firms whose cargo bookings are affected will also have to pay the price.

Major carriers, such as Mediterranean Shipping Company and Maersk, have started to charge emergency freight rates and global emergency bunker surcharges for rerouting or temporary storage of cargoes at alternative ports, or returning them to their port of origin.

Portcast said that as mainline vessels continue to avoid direct Gulf calls, Gulf-bound shipments are likely to be discharged at regional relay hubs and trans-shipment ports.

“This will create congestion at alternative hubs absorbing diverted volumes and bottlenecks at Asian trans-shipment ports such as Singapore, Tanjung Pelepas and Port Klang, if carriers continue to restrict Gulf-bound loadings,” said Ms Gupta.

PSA Singapore said in a statement that it has been closely monitoring the Middle East situation.

“(PSA) remains in regular communication with our shipping line customers, engaging them to pre-empt and address their evolving operational requirements arising from the geopolitical situation,” said a spokesperson, adding that “container volumes at PSA remain strong and the close collaboration with our customers and partners has also helped ensure that the port is not experiencing congestion due to the Middle East situation”.

The spokesperson noted that PSA’s priority has been to maintain reliability, operational efficiency and seamless connectivity for all shipping lines calling at Singapore. “We have also offered bespoke solutions to beneficial cargo owners and supply chain stakeholders who need help with shipments affected by disruptions.”

While shippers and traders engaged in legal trade suffer, Iran appears to be working on a verification scheme for Hormuz transits, which experts believe will mostly benefit cargo movements to and from its own ports.

Lloyd’s List said nearly 60 per cent of all transits have an Iranian nexus – either through trade, ownership or flag. The figure is over 90 per cent when looking at most recent activity, it added.

It said virtually all voyages tracked into the Gulf since March 16 were part of Iran’s shadow fleet of tankers and gas carriers.

The shadow fleet refers to a large, clandestine network of ageing oil tankers and cargo vessels used by sanctioned nations – such as Russia and Iran – to transport commodities while bypassing Western sanctions, insurance requirements and maritime safety regulations.

These ships often use deceptive tactics, including turning off their automatic identification system transponders, changing flags to nations with weak oversight, and falsifying registration documents, in order to operate outside international oversight.

Analysts said the supply chain disruptions and rising energy prices will deliver a stagflationary effect – where inflation rises and economic growth stalls.

Dr Chua Hak Bin, regional co-head of macro research at Maybank, said: “The Middle East conflict is unleashing a stagflationary shock on the world and Asia.”

He said supply disruptions and rising energy prices will fan inflation, while shocks to tourism and trade with surging freight and airfare costs will hurt economic growth.