Extended disruptions in the Middle East and shipping routes could trigger a domino effect that increases global freight costs and shrinks shipping capacity.

“If you want to book your freight, the baseline, the start, the starting cost is going to be that much higher because of risk, because of increased sailing distances that you have to go. And once you start using up your assets for longer periods of time, supply and demand, now capacity starts to shri”

Shipping companies are increasingly diverting vessels away from the Strait of Hormuz to safer, albeit longer and more expensive, routes to protect their goods.

“But other commodities, dry in large part, we can avoid it. So to Anton's comments, the aluminum sector has in large part shifted, deviated from that area for now. But in addition, ships are navigating away and it means a longer transit time, which means a more costly voyage, so it's less desirable.”