COSCO Shipping Restarts Bookings to Middle East Amid Iran Transit Deal

COSCO Shipping Lines has announced the resumption of new container bookings to and from various ports in the Middle East, including the United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Kuwait, and Iraq. This decision was communicated through a service notice released on the company's official WeChat account.

The company's move comes in the wake of a statement from Iran's permanent mission to the United Nations, which declared that 'non-hostile' vessels—regardless of their country of origin—could navigate the Strait of Hormuz safely provided they did not engage in actions against Iran and adhered to relevant safety and security standards.

The Strait of Hormuz is a critical maritime passage, accounting for nearly one-fifth of the global oil and liquefied natural gas trade. Recent geopolitical tensions have severely disrupted traffic through this vital chokepoint, with shipping flows declining by as much as 97 percent at one point due to escalating conflict involving Iran. This has resulted in increased insurance premiums and significant fluctuations in freight and energy prices.

Earlier this month, COSCO halted all new bookings for routes connecting with Middle Eastern ports in response to escalating tensions and the impact on maritime traffic through the Strait of Hormuz. This suspension affected service to the six nations mentioned previously.

In addition to COSCO, other major players in the container shipping sector, such as Maersk, Hapag-Lloyd, and CMA CGM, began rerouting their vessels around Africa starting March 1, avoiding critical routes including the Suez Canal and the Bab el-Mandeb Strait. This decision followed military strikes by the US and Israel on Iran, along with the closure of the Strait of Hormuz.

The recent conditional reopening of this strategic waterway has eased concerns related to navigational safety to some degree; however, uncertainty remains heightened, as highlighted by Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation.

Zhou has stated that the reliability of shipping routes during this period is contingent on the shifting circumstances, given the inevitable time delays between booking and the actual delivery of cargo.

In its statement, COSCO acknowledged the volatile situation in the Middle East, noting that new booking arrangements and actual shipments may be subject to changes. The company has pledged to monitor regional developments closely.

COSCO's decision to resume bookings can be seen as a tactical adjustment, aimed at minimizing supply chain disruptions and sustaining essential trade flows amidst ongoing risks, according to Zhou.

Amidst inquiries regarding the safe passage of Chinese vessels through the Strait of Hormuz following Iran's recent announcements, Chinese Foreign Ministry spokesperson Lin Jian underscored the importance of maintaining peace and stability in the Middle East, emphasizing that secure shipping routes are in the common interest of the international community.

Lin emphasized the urgent need for all involved parties to fulfill their responsibilities by ceasing military operations, which could further escalate the situation and adversely impact the global economy.