Reopening strait of Hormuz would have limited impact on cargo flows, says Maersk
Summary
The CEO of Maersk said reopening the Strait of Hormuz will only have a small effect on shipping cargo flows. High fuel costs due to the closed strait have increased expenses for the shipping company, but it has passed these costs on to customers.Key Facts
- The Strait of Hormuz is a key shipping channel where about 20% of the world’s oil and gas usually passes.
- The strait has been mostly closed since late February, causing fuel prices to rise sharply.
- Maersk’s fuel bill nearly doubled, adding around $500 million in costs each month.
- Maersk increased freight rates to cover higher fuel costs.
- More than 800 ships and 20,000 crew members are stuck west of the strait due to the closure.
- The US-flagged ship Alliance Fairfax recently passed through the strait safely with US military escort.
- Maersk expects demand for shipping containers to grow by 2% to 4% this year, despite some revenue decline.
- Maersk’s shares dropped by up to 4% in Copenhagen stock trading after the report.
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