UBS: Shipping Supply Chain Weekly — Trade Flows, Freight and Hormuz Updates (Week 14)
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UBS tracks global shipping supply chains, revealing severe disruptions from the Middle East conflict. Strait of Hormuz transits remain down 95% from normal pre-conflict levels of roughly 125 vessels per day, averaging just 8 daily transits over the past week. This bottleneck has driven a surge in very large crude carrier (VLCC) spot rates, with Middle East-to-China TCE rates reaching $348,000 per day—a 60% increase compared to pre-conflict levels.
Approximately 11% of global oil and 6% of natural gas production capacity remain shut-in, intensifying the scramble for alternative energy supplies. Crude exports from Yanbu currently stand at 5 million barrels per day, with 30 VLCCs waiting or en route. Vessels rerouting around the Cape of Good Hope have surged dramatically, with westbound crude and product tankers increasing 80% and 145%, respectively.
Chinese major port container throughput dipped 2% week-over-week but remains up 3% year-over-year. The Shanghai Containerized Freight Index (SCFI) advanced 2% weekly and 33% annually. Despite recent softness in the Shanghai-to-North Europe route, rates remain significantly elevated compared to late February. Container ships rerouting around the Cape of Good Hope have also increased 9–12% year-over-year, providing structural support for elevated freight rates amid ongoing geopolitical uncertainty.