Avoid the Middle East! At least five iron ore cargo ships diverted en route to Asia

# Zhang Yaqi  

Source: Wall Street CN  

The escalation of the Middle East conflict has paralyzed shipping through the Strait of Hormuz, forcing iron ore cargo ships of mining giants such as Anglo American and Vale to make emergency diversions to the East Asian market. As the Middle East is a key global base for direct reduced iron (DRI), supply chain disruptions have led to a sharp tightening of iron ore pellet supply, pushing Singapore futures prices to a two-month high. Rising shipping costs and operational expenses are posing severe challenges to this highly concentrated global lifeline for energy and raw materials.  

The ongoing escalation of the Middle East conflict is rapidly disrupting the global seaborne iron ore trade pattern. According to CCTV News, early on the morning of the 12th local time, officials at a southern Iraqi port stated that two foreign oil tankers were attacked and set ablaze in Iraqi territorial waters. At least one person was killed and 38 crew members were rescued, prompting Iraq to immediately suspend operations at its oil ports.  

Xinhua News Agency reported that the UK Maritime Trade Operations (UKMTO) stated on the 12th that a cargo ship was hit by an unknown projectile near the Strait of Hormuz, causing the vessel to catch fire. As a result, navigation through the Strait of Hormuz has been nearly paralyzed. Multiple iron ore-laden cargo ships en route have made emergency destination changes to East Asia, driving up iron ore futures prices.  

Tracking data from shipping analytics firm Kpler shows that at least 5 iron ore cargo ships have diverted midway—3 owned by UK mining giant Anglo American and 2 by Brazilian miner Vale. These vessels, originally bound for Bahrain and Oman, have now redirected to Vietnam, Singapore, Malaysia, and other countries respectively.  

The route adjustments have particularly impacted the markets for iron ore concentrate and pellets. The Middle East is a major global hub for DRI production, which relies heavily on imported high-quality iron ore pellets. Alexis Ellender, an analyst at Kpler, noted, "The war in the Middle East has significantly tightened iron ore pellet supply." Singapore’s benchmark iron ore futures price rose by over 1.3% at one point to $105.55 per ton, a new high since mid-January.  

## Bahrain and Oman Bear the Brunt of Forced Diversions  

Kpler data indicates that Anglo American’s *Cape Shangrila*, originally bound for Bahrain, has diverted to Singapore; the *Cape Jasmine*, also initially heading to Bahrain, is now en route to Vietnam; and the *Mineral Zimbabwe* has shifted from Oman to destinations in Asia. Two Vale vessels originally destined for Oman have also redirected to Malaysia and other countries. Additionally, Kpler data shows that other ships have been forced to anchor outside the Arabian Gulf, with no immediate plans to resume navigation.  

The Strait of Hormuz is one of the world’s most critical shipping lanes. Following the U.S.-Israeli military strikes against Iran, Iran launched attacks on transiting vessels, leading to a near-complete halt of maritime traffic through the strait. Meanwhile, the war has driven up shipping fees and fuel costs, further increasing the landed price of goods.  

Bahrain and Oman are key pellet production and export hubs in the Middle East. Bahrain is both an importer and exporter of pellet feedstock, while Oman boasts larger pellet export capacity, with Vale operating a dedicated plant at its Sohar Port. Macquarie Group estimates that Gulf countries’ total DRI output in 2025 will reach approximately 14 million tons.  

David Cachot, Research Director at Wood Mackenzie, warned, "The current geopolitical unrest exposes the significant vulnerability of this already highly concentrated supply chain." He noted that any disruption to pellet feedstock inflows or pellet exports will "quickly spread" across the entire DRI industry.  

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