The Iran Conflict: What It Means for PalletBiz Operations and Our Industry
The Iran Conflict: What It Means for PalletBiz Operations and Our Industry
- Insights, Press Releases
- Bahrain, Oman, Saudi Arabia, South Africa, United Arab Emirates
- Business, Group news, Locations
Operations – current status
All PalletBiz operations (including our Middle East locations in Bahrain, UAE, Oman, and Saudi Arabia) are currently operational. Effects including shipment delays, rising insurance premiums, and higher transport fuel costs are already being felt across the network. We are monitoring developments daily and have activated contingency measures.
What Has Happened
On 28 February 2026, the United States and Israel launched coordinated military strikes on Iran, triggering large-scale retaliatory attacks across the Gulf region. As of today (day 16), active hostilities continue with no ceasefire agreed, per the UK House of Commons Library and CFR Global Conflict Tracker.
The Strait of Hormuz — through which approximately 20% of global oil supply normally transits (UNCTAD) — has been effectively closed to commercial shipping. Maersk, CMA CGM, Hapag-Lloyd, and MSC have all suspended Gulf transits. Simultaneously, Houthi forces in Yemen resumed Red Sea attacks, closing both primary trade routes between Asia, the Middle East, and Europe. Vessels are now rerouting via the Cape of Good Hope, adding 10–14 transit days and significantly higher operating costs per voyage.
The energy price impact is immediate: Brent crude has risen over 40% since the conflict began — from approximately $70 to above $100/barrel — per the IRU Fuel Price Monitor (13 March). European natural gas benchmark prices rose approximately 75% in the first two weeks, per PBS NewsHour.
Implications Across Our Footprint
Middle East — Bahrain, UAE, Oman, Saudi Arabia
Our Middle East units are operational, but port disruptions are active and conditions are evolving. Per a recent report by Automotive Logistics (13 March), 16 vessels have been struck in or near the Strait since 1 March, and commercial transits have fallen by over 93% year-on-year.
- Bahrain: APM Terminals at Khalifa Bin Salman Port suspended operations on government advice on 12–13 March.
- Oman: Salalah port operations suspended following vessel attacks on 11 March.
- UAE: Jebel Ali Port — the region’s largest container hub — faces congestion and disruption. Dubai International Airport was temporarily evacuated due to a drone-related incident.
- Saudi Arabia: Iranian retaliatory strikes have targeted energy facilities and US-linked infrastructure, per the Associated Press.
For our operations: inbound shipments of raw materials face active delays; war-risk insurance premiums have increased materially across all Gulf-related cargo; and customer demand is being affected by broader regional economic uncertainty.
Europe — Austria, Germany, Hungary, Poland, Romania, and others
No direct security exposure, but indirect cost pressures are measurable and rising. Diesel has exceeded €2/litre in Germany, France, Italy, and the Netherlands, per IRU. European gas prices have risen sharply following disruption to Qatari LNG exports — a key supply source since Europe reduced its dependence on Russian pipeline gas.
- Production costs: Higher energy prices directly affect kiln-drying and manufacturing operations across our European units.
- Logistics costs: Cape rerouting adds lead times across our customers’ own supply chains — particularly in automotive, FMCG, and industrial sectors — which compresses procurement budgets and may delay orders.
- Macro outlook: Chatham House estimates the eurozone could contract in Q2 if the conflict persists for several months.
South Africa
No direct security impact. The Cape rerouting is increasing maritime traffic through South African waters, which may stimulate demand from logistics and port-adjacent industries. However, domestic fuel prices are rising in line with Brent crude, and agricultural sector customers face higher fertiliser costs as Gulf-route supply is disrupted — a risk flagged by UNCTAD given that approximately one-third of global seaborne fertiliser trade normally transits the Strait of Hormuz.
How PalletBiz Is Responding
- Daily monitoring: All Middle East units are in daily contact with Group management. Port status, carrier availability, and local security conditions are being tracked in real time.
- Shipment contingency: Where deliveries have been affected by port suspensions or carrier embargoes, we are working with customers and logistics partners to identify alternative routing, sourcing, or adjusted timelines.
- Insurance review: Cargo and business insurance arrangements across our Middle East operations are under active review to ensure adequate war-risk coverage is in place.
- Customer communication: Key account customers across all regions have been notified of potential lead time impacts and are being kept updated as conditions change.
- Cost management: We are assessing the impact of rising fuel and energy costs on production and delivery across the network. Any pricing adjustments required will be communicated to customers with appropriate advance notice.
This article will be updated as the situation develops. For specific enquiries about your orders or our operations in any location, please contact your local PalletBiz representative directly.
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