The ongoing conflict in West Asia has triggered a sharp spike in global shipping costs, significantly affecting the movement of crude oil, LPG, and container cargo headed to the region. According to the shipping ministry, freight rates for some categories have climbed dramatically since the outbreak of the war, putting pressure on trade and logistics operations. Shipping rates for liquefied petroleum gas (LPG) have more than doubled during the conflict period. Before the tensions escalated, maritime freight charges for LPG stood at nearly $94 per tonne. By May 15, the rates had surged to approximately $207 per tonne.
A similar trend has been observed in crude oil transportation. Freight costs for shipments have risen from $14 per tonne before the conflict to nearly $28.6 per tonne. Container shipping has seen the steepest increase, with charges rising from $203 per twenty-foot equivalent unit (TEU) to nearly $2,000 per TEU.
According to a TOI report, officials attributed the steep rise to growing uncertainty and elevated operational risks in the region, which have disrupted regular shipping routes and trade flows.
Shipping Ministry Closely Monitoring Situation
Responding to questions during a media briefing on developments in West Asia, an additional secretary in the shipping ministry, Mukesh Mangal, said authorities are keeping a close watch on the changing freight market, according to the report.
The ministry has also issued an advisory to ensure transparency in shipping prices as freight operators revise rates in response to geopolitical tensions.
Industry data accessed by TOI revealed that Indian ports have witnessed a major decline in shipping traffic to West Asia since the conflict began. The average monthly number of vessels operating on these routes has dropped sharply from around 444 ships to nearly 125.
Rates Show Slight Moderation After April Peak
Data indicate that freight charges for LPG have continued to rise steadily since the beginning of the conflict. In contrast, rates for crude oil and container cargo reached their peak towards the end of April before showing slight moderation by May 15.
Despite the recent easing, officials maintain that the situation remains highly uncertain and dependent on geopolitical developments in the region.
“This situation is dynamic, and we are keeping a close watch on the developments. Freight charges will moderate when the conflict ends,” said an official in the report.
The rise in shipping costs is expected to have a wider impact on import expenses, supply chains, and trade-linked sectors if tensions persist for a longer duration.