The ongoing conflict in the Middle East has so far had only limited direct impact on the multipurpose vessel (MPV) sector, although shipping executives warn that longer-term risks remain if the situation escalates.
Arthur English, chief executive of Norway-based MPV operator G2 Ocean, said both spot and forward freight rates remain relatively stable despite the geopolitical tensions.
“The ongoing conflict in the Middle East has so far had limited direct impact on our operations,” English said.
However, the company has already taken precautionary measures. One vessel partially loaded with cargo bound for the region had its voyage cancelled following a risk assessment and discussions with the shipper.
Instead of entering the high-risk zone — which includes the Strait of Hormuz, the Persian Gulf and surrounding waters near Saudi Arabia, Kuwait, Qatar and the United Arab Emirates — the cargo was discharged outside the area.
“Currently, we are not accepting new bookings into the high-risk area, in line with our risk management practices,” English explained.
Fuel costs becoming a key concern
While freight rates have remained stable for now, analysts warn that the conflict is already affecting bunker fuel markets.
Data from Toepfer Transport’s Multipurpose Index shows MPV charter rates continuing to fluctuate within a relatively narrow range between $12,000 and $13,000 per day over the past year. The latest reading for March stands at $12,750 per day.
However, analysts say the escalation in the Middle East could create new volatility.
“There are currently 19 MPV vessels effectively locked in the Arabian Gulf, while the conflict is having significant effects on bunker prices and supply,” Toepfer noted in its latest report.
The broader outlook for 2026 remains cautiously optimistic, although some industry participants are beginning to raise concerns about potential disruptions in 2027 if tensions persist.
English noted that bunker prices have already begun to climb.
“Bunker prices have increased since the conflict escalated, driven by tighter availability and supply risk, particularly in Asia,” he said.
Depending on the route, the rise in fuel prices is adding between $3 and $7 per ton of cargo to overall transport costs.
In Singapore — the world’s largest bunkering hub — marine fuel prices have surged dramatically.
A recent report from the UN Conference on Trade and Development (UNCTAD) indicates that fuel prices climbed from around $400–$450 per metric ton last month to between $874 and $1,000 per metric ton.
Meanwhile S&P Global Energy assessed the price of 0.5% sulfur marine bunker fuel in Singapore at $1,050 per metric ton, more than double the price recorded before the conflict began.
Long-term implications for project cargo
Beyond immediate fuel costs, the conflict could also reshape breakbulk and project cargo flows in the region.
According to Drewry analyst Anurag Kumar, the Middle East remains a key market for MPV cargo, particularly exports such as petrochemicals, aluminium, steel, oil and gas equipment and fertilizers.
Imports typically include heavy machinery, construction materials, agricultural products and large project cargo shipments.
Major project cargo hubs include Jubail in Saudi Arabia and Jebel Ali in the United Arab Emirates.
Kumar noted that reconstruction following the conflict could eventually generate a surge in demand for heavy industrial cargo, including power generation equipment, steel structures and oil and gas infrastructure.
In the meantime, however, the ongoing tensions could trigger freight volatility, higher insurance costs and reduced shipping capacity, particularly if the conflict continues for several weeks.
