The escalation of the Iran conflict forced Danish container shipping giant Maersk to halt two key trade routes linking markets in the Middle East with Europe and Asia. File Photo by Jerry Lampen/EPA-EFE
March 6 (UPI) — Global shipping giant Maersk announced Friday it was temporarily halting two key routes linking the Middle East and Gulf region with the Far East and destinations in Europe as a precautionary step due to what it described as “the escalating” Iran conflict.
The company said in a news advisory that following an assessment of the risks to shipping in the Gulf region and an operational review, it had taken the decision “as a precautionary measure to ensure the safety of our personnel and vessels while minimizing operational disruption across our wider network.”
“For the ME11 [Middle East-Europe] and FM1 [Middle East-Far East] final eastbound voyage, we are finalizing the timing and vessel details and will update you as soon as this information is confirmed,” it added.
Maersk also said that it was suspending shuttle services within the Gulf region until further notice and that its ME1 service connecting the Middle East with Northern Europe would temporarily bypass Dubai in both directions and only stop in Oman before going straight on to India on the eastbound leg and Morocco on the return leg.
The suspensions ensure Maersk’s vessels stay clear of the Strait of Hormuz amid threats by Tehran to “set fire” to anything that tries to pass in or out of the Persian Gulf.
Markets see the Danish company as a bellwether of global trade, with the move adding to escalating supply chain disruptions due to the conflict engulfing the region following strikes launched against Iran by the United States and Israel at the weekend.
Shipping via the Strait of Hormuz, through which 20% of the world’s oil and gas is shipped out from Iraq, Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates and Qatar to the rest of world, is effectively at a total stop.
At least 147 container ships are stranded on the wrong side of the strait, taking refuge in the Persian Gulf.
Security fears have prompted major shipping lines, including Switzerland’s MSC and France’s CMA CGM, to ditch plans to resume using the Suez Canal route and continue diverting the long way round via the tip of southern Africa. MSC has temporarily halted all bookings for the Middle East.
The disruption has thrown schedules, caused congestion at ports and sent freight rates for everything higher.
Shares in Maersk were trading 0.6% higher on the NASDAQ Copenhagen Exchange on Friday afternoon at $2,637 a share.
