As oil movement out of the Strait of Hormuz approaches pre-war levels, the worst of the freight rate escalations since the start of the conflict in the Middle East may be over.
Although container prices out of China to the U.S. West and East Coasts have escalated 344 percent and 335 percent since Feb. 28, according to data from Xeneta released Friday, the ocean and air freight benchmarking platform provider suggests that the elevated rates may now see a plateau.
“We can say with a level of confidence that the market has reached its post-Hormuz crisis peak in 2026,” said Peter Sand, chief analyst at ocean and air freight benchmarking platform Xeneta in a weekly update Friday. “Demand is not strong and rates have now peaked, but they will not collapse, so shippers should expect to pay elevated freight costs for the remainder of the year.”
The spread between the two coasts has accelerated to $3,177 per 40-foot equivalent unit, with East Coast-bound containers reaching $11,523 on average and West Coast-bound boxes averaging $8,346. The gap between the two had been just $772 before the crisis, according to Sand.
“The spread will narrow as the broader decline takes hold in the remainder of the year, driven mainly by a harder fall into the U.S. East Coast due to its more elevated starting point,” said Sand. “Rolling forward three months, that could see spot rates into the East Coast in the range of $6,000-$7,000 and West Coast around $4,500-$5,500.”
Locally, rate pressure remains high for the rare instances in which cargo passes through the Strait of Hormuz. The UAE’s National Association of Freight and Logistics says the total cost of moving cargo into the Persian Gulf is running three to five times pre-war levels, driven by accumulated surcharges, rerouting and land-transport costs rather than base ocean rates. The costs have not subsided as of early October.
Meanwhile, the attacks on vessels in the waterway have intensified. Attacks hit their highest weekly level since the war began, with at least 12 strikes on oil, LNG and LPG tankers in the week of Sept. 28 to Oct. 5, per three maritime security sources cited by Reuters. The International Maritime Organization separately verified nine incidents that week, against a previous high of eight in the week of July 13.
The latest strike came Tuesday, when an unknown projectile hit the Panama-flagged tanker On Peace, injuring 12 crew members, according to India’s foreign ministry.
Two tankers were struck Sunday—an inbound LPG carrier and the product tanker Lipsi— and the Islamic Revolutionary Guard Corps (IRGC) ordered a tanker near Oman to turn back Monday, according to the U.K. Maritime Trade Operations (UKMTO). The U.S. Navy-led Joint Maritime Information Center said Sunday that the IRGC is still showing intent to assert presence “along key transit lanes” via drone overflights and surveillance.
Vessel movement remains low amid the constant threats in the strait. Maritime intelligence software company Windward counted 11 tanker and cargo crossings in the 24 hours ending Tuesday, with three inbound and eight outbound. Total vessel movements remain well below the pre-war norm of about 125 vessels a day.
Nevertheless, the oil is flowing, just not through the strait the way it used to. Kpler’s latest briefing puts its confirmed total Hormuz clearance at 11.5 million barrels per day on a seven-day average, about a third below the 17.1 million bpd pre-war baseline. Strait transits alone are averaging 9 million barrels per day, though attacks on tankers and logistical constraints cloud the outlook for sustained higher flows.
With roughly 40 percent of regional exports now bypassing the strait via terminals at the UAE’s Port of Fujairah and ship-to-ship transfers in the Gulf of Oman, the regional average reaches 21.7 million bpd, just 7 percent below pre-war baseline levels.
Secretary of State Marco Rubio said Wednesday in Athens that Iran has “lost complete control” of the strait: “there’s almost as much oil flowing out now as there was before this conflict began.”
Hours later, IRGC adviser General Mohammad Reza Naqdi told Fars News Agency that “the Strait of Hormuz is closed, and the armed forces of the Islamic Republic of Iran have full control over it,” adding that “illegal routes” hugging Oman’s coast would soon be shut.
Vice President JD Vance told Reuters Wednesday that Iran must make a “meaningful” reduction in uranium enrichment capacity, which analysts read as a softening from Washington’s earlier demand that Tehran abandon nuclear enrichment entirely.
Brent crude oil futures traded around $101 per barrel Wednesday and WTI near $89 to $90, lifted by Monday evening’s Houthi strikes on Saudi airports but capped by recovering Gulf exports and G7 emergency stock releases.
