By Eric Vandenbroeck and co-workers

Iran warned the United Arab Emirates (UAE) on March 21 against allowing its territory to be used for attacks on two disputed islands in the Gulf, near the strategic Strait of Hormuz.

The military’s operational command Khatam Al-Anbiya said: “We warn the United Arab Emirates that if any further aggression originates from its territory against the Iranian islands of Abu Musa and Greater Tunb in the Persian Gulf, Iran’s powerful armed forces will subject Ras Al Khaimah in the UAE to heavy strikes.”

Abu Musa and the Greater Tunb islands, controlled by Iran but claimed by the UAE, have long been a source of dispute between the two countries.

Iran accuses Gulf states of allowing US forces to carry out attacks from their territory, and has launched missile and drone strikes against what it calls US interests in those countries throughout the war.

Gulf states have repeatedly denied Iran’s accusations, saying that even before the war, they would not allow their territory or airspace to be used to attack Iran.

 

The Trump administration waived sanctions on the purchase of Iranian.

Oil and liquefied natural gas tankers moving through the Strait of Hormuz carry around 20% of the world’s supply. But for countries on the Persian Gulf, the waterway is more than just an energy route; it’s a lifeline for more than 100 million people.

Now, as the United States and Israel’s war with Iran chokes this vital stretch of water, it’s also straining food supply into the region.

Thriving in this harsh climate takes effort. With summer temperatures topping 50 degrees Celsius (122 Fahrenheit) and little cultivatable land, much of the Gulf Arab states’ drinking water comes from the sea via desalination plants. Most of their food, however, must come from abroad.

Saudi Arabia imports more than 80% of its food, the United Arab Emirates around 90%, and Qatar about 98%. In Iraq, too, the bulk of food imports passes through the Strait of Hormuz, despite the country’s access to two major rivers.

In total, the majority of the food shipments to the region pass through the strait, a passage that is now all but blocked due to attacks on commercial ships in the area.

With the waterway effectively closed, food shippers are scrambling to find alternative routes – routes that are costlier and logistically strained, and that cannot fully replace lost flow, raising the prospect of higher prices and reduced choice for consumers.

Even Iran depends on the Strait of Hormuz for much of its trade.

Retailers say that, while there’s no imminent hunger crisis in the Gulf region, the conflict has upended sea freight.

Customers shop inside a Spinneys supermarket in Dubai, United Arab Emirates.

Kibsons International, a UAE-based fresh food and vegetable retailer, imports 50,000 tons of food per year, sourcing food from countries like South Africa and Australia, and says the focus now is on rerouting shipments.

According to UK Maritime Trade Operations (UKMTO), a British military-run monitoring agency, almost two dozen vessels have been attacked in the region since the start of the war on February 28, including a cargo vessel off the coast of Oman. Shipping companies are therefore unwilling to take the risk of moving through the Strait of Hormuz.

Another issue is the number of vessels already at sea. Tons of food, mostly fresh, in containers on ships currently waiting outside the strait, with no confirmed arrival dates or even ports. Meaning there is a lot of uncertainty. Then there’s the cost of insurance.

 

The price of doing business

Buried in the fine print of shipping contracts are wartime clauses that have now kicked in. These clauses protect ships from entering dangerous territories and give them the right to choose a drop-off port for shipments.

One of Kibsons’ containers, originally destined for Jebel Ali Port in Dubai, is now in Mundra, India. Another was rerouted to Colombo, Sri Lanka. But simply reaching land is far from the end of the conundrum.

A family sits against the backdrop of a dockyard off the UAE's coastal city of Fujairah, on the Strait of Hormuz.

Insurers and shipping companies now see the wider Middle East region as one of heightened risk.

Shipping companies have slapped $4,000 surcharges per container destined for the entire Middle East. On dry land, trucking and logistics costs range from $4,000 to $9,000 per container to move goods onward to the UAE.

Containers out of Europe, with a normal price of 3,000 euros (around $3,400) for one freight. The quote now is at 14,500 euros, and that’s to get it to Jeddah, the Saudi Red Sea city. Then one would still need to truck it from there with even additional costs.

And those costs will eventually be passed on to the consumer. Kibsons might increase prices by up to 20% on some products, such as dairy and some fresh produce. “We have about a month of inventory of fresh produce in warehouses.”

Air freight is also a vital lifeline for the region, but this has also been plagued by problems in recent weeks.

An Emirates aircraft prepares for landing as a smoke plume rises from a fire near Dubai International Airport in Dubai.

On Monday, April 16, flights were temporarily suspended at the airport after Dubai Civil Defense reported a fire resulting from an impact of a drone attack on one of its fuel tanks.

Spinneys, another well-known retailer with roots in the region since 1924, is confident it can secure its supply chain.

Having weathered past conflicts and economic turmoil in markets like Lebanon and Egypt, it now faces unprecedented challenges in the Gulf. Turning to contingency plans, Spinneys is exploring trucking containers of food from the United Kingdom, through France, and finally into Turkey before heading to Iraq, Saudi Arabia, and the UAE.

 

Rising prices on the shelves

The knock-on effect of these disruptions is not ideal for the consumer, however, who can expect to pay higher prices with less choice.

In response, Gulf Cooperation Council (GCC) governments are trying to ease these bottlenecks.

Oman and the UAE have introduced a new trade corridor, which is expected to accelerate clearance processes between ports such as Muscat and Jebel Ali.

Talk of securing the strait militarily has risen in recent days, especially after US President Donald Trump tasked the US Development Finance Corporation with offering security guarantees to shipping companies, and even raised the prospect of US Navy escorts.

Ships line up in the Strait of Hormuz as seen from Khor Fakkan, United Arab Emirates.

Before the crisis, the Strait of Hormuz would wave up to 60 tankers through its waters a day, according to Lloyd’s List Intelligence. And even if such a complex and expensive operation were to kick in and be successful, the problem of moving cargo ships laden with food and other vital goods would remain, as tankers carrying oil would be prioritized.

Trump and his administration remain bullish about ending the war on their terms. But with each passing day, the consequences are spreading beyond the battlefield, threatening the flow of food, fuel, and other essentials to millions across the region.

 

 

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