Strait of Hormuz closure drives up shipping costs for Kurdish traders in China

BEIJING - The closure of the Strait of Hormuz amid escalating regional conflict has sharply increased shipping costs and disrupted trade routes between China and the Middle East, affecting Kurdish traders who export goods to Iraq and neighboring countries.

The price of shipping a 20-foot container has surged from around $2,000 to more than $3,500, according to traders. Shipping companies have warned that costs could rise even further if the waterway remains closed.

Dalal Mohammed Karim, a Kurdish trader based in China, told Rudaw exporters have already received notices of price increases from shipping companies.

“What has been most affected is the export of goods from China to Middle Eastern countries, including Iraq,” Karim told Rudaw. “Yesterday we received an email from the company CMA, a major shipping line operating between China and the Middle East, informing us that container prices will increase by $2,000 to $4,000 depending on the type of container.”

The Strait of Hormuz is considered a vital artery of the global economy, linking Gulf oil producers with international markets. Its closure has forced traders and shipping companies to consider alternative routes that significantly increase both transit time and costs.

These alternatives include shipping goods through the Red Sea to the port of Aqaba in Jordan or to Mersin in Turkey before transporting them overland to Iraq.

Nazar Sami, another Kurdish trader in China, said shipments are continuing for now but warned that prolonged disruption will inevitably affect supply chains.

“At the moment, we are loading containers and sending them out, but if the Strait of Hormuz remains closed for a long time, shipping routes will automatically have to change,” Sami said. “Delivery times will become longer and transportation costs will rise, and these increases will eventually affect markets and consumers.”

China is Iraq’s largest trading partner, with annual trade between the two countries exceeding $55 billion. Iraq is also a key participant in China’s Belt and Road Initiative, a global infrastructure and trade network linking Asia with Europe and the Middle East.

Mahdi Faraj contributed to this article from Beijing.