COSCO Resumes Gulf Services as Hormuz Routes Reopen

Context

China COSCO Shipping Lines announced on March 25, 2026 that it had reopened standard container bookings from the Far East to six Gulf markets — the United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Kuwait and Iraq — after suspending services earlier in March, according to the company's advisory and reporting by InvestingLive (COSCO advisory, Mar 25, 2026; InvestingLive, Mar 26, 2026). The move has been interpreted by market participants as an early, cautious signal that commercial transits across the Strait of Hormuz can resume under specific operational conditions, even while the security environment remains unstable. COSCO's confirmation explicitly warned that booking arrangements and actual sailings remain subject to disruption, underscoring that the reopening is conditional and operationally constrained. For supply-chain watchers and institutional investors, container flows to the Gulf are being treated as a leading barometer for whether insurers, charterers and other carriers will normalize risk assessments for the corridor.

The Strait of Hormuz remains geopolitically sensitive because it channels a disproportionate share of global oil and refined products: roughly one-fifth of seaborne crude oil flows transit the strait on a typical year (IEA, 2024). Even short-term interruptions can therefore have outsized effects on energy markets, freight costs and regional trade corridors. COSCO's resumption of bookings does not equate to a full commercial reopening; rather, it marks a shift from blanket suspensions to a selective, potentially two-tier system of operations in which some carriers and cargo types will be serviced while others remain deferred. That distinction matters for risk-pricing in freight derivatives, war-risk insurance, and the economics of diversion via Suez or alternative pipelines.

Historically, container carriers have used calibrated reinstatements of service to probe the market environment. COSCO — one of the world's largest container operators and a top-three carrier by fleet capacity in the last several years (Alphaliner, 2025) — holds both operational scale and a political relationship with Chinese authorities that makes its routing decisions consequential for peers. The carrier's advisory is being read not only as a commercial decision but as a signal about the confidence of shippers and underwriters; changes in container bookings can precede broader routing normalization by several weeks, offering institutional investors an early indicator of how geopolitical shocks propagate into trade flows.

Data Deep Dive

The primary data point in the COSCO advisory is explicit and immediate: standard container services to six named Gulf markets reopened as of March 25, 2026 (COSCO advisory, Mar 25, 2026; InvestingLive, Mar 26, 2026). That declaration follows an earlier suspension of Gulf sailings by COSCO in early March 2026; the advisory did not promise fixed schedules but instead emphasized fluid security conditions that could interrupt bookings. The specific naming of the six destinations is material — it signals a focus on principal commercial hubs (UAE and Saudi Arabia) and smaller but strategically significant markets (Bahrain, Qatar, Kuwait, Iraq) — and suggests an intention to serve both large-volume container lanes and regional feeder connections.

Beyond the advisory, two external benchmarks are worth noting. First, the Strait of Hormuz accounts for roughly 20% of global seaborne oil trade (IEA, 2024), meaning that disruptions there create asymmetric shocks across energy-sensitive industries and regional logistics. Second, regional port throughput trends provide context on demand: DP World reported continued expansion for the UAE's container throughput in 2025, with a modest year-over-year increase that reflects resilient Gulf import demand into late 2025 (DP World, 2026). That underlying demand dynamic makes the Gulf an economically logical target for a calibrated resumption of service, even if schedules are irregular and contingent on security assessments.

A third data point comes from insurance and freight-risk markets: while public indices are volatile, several brokers reported that war-risk surcharges for transits in the Gulf remained materially above pre-tension levels in March 2026, reflecting insurer caution even as some carriers test the corridor (Brokers' market reports, Mar 2026). Those premiums directly affect landed cost calculations for shippers and can make rerouting via longer corridors (e.g., via the Cape or increased pipeline throughput) economically attractive for high-value or time-sensitive cargo. Collectively, these data show a market in transition: demand and port capacity are present, but risk pricing and operational reliability remain elevated and uneven.

Sector Implications

For container carriers, the differentiated reopening creates both tactical and strategic implications. Tactically, carriers that resume selective sailings can capture incremental yield if booking demand outstrips the limited available lift; shipping lines can levy premiums for constrained capacity and charge additional surcharges tied to security and insurance. Strategically, however, uneven reopenings risk establishing a two-tier system in which larger state-affiliated carriers or carriers willing to accept higher war-risk exposures serve certain routes, while others defer permanently or redirect to alternative corridors. That scenario would re-shape freight rate mechanisms and slot allocation for intra-Asia-to-Gulf trades.

For regional ports and terminal operators, the resumption has a more immediate effect on throughput and transshipment dynamics. Ports such as Jebel Ali and Dammam benefit from restored direct services because re-routing via secondary hubs increases dwell times and costs. The short-term effect could be concentrated gains for Gulf terminals: even a partial reinstatement of regular services could boost weekly TEU volumes by a measurable margin relative to the suspension period, increasing terminal utilization and potentially compressing slot availability for feeder operators.

Energy markets will also watch container traffic as a non-energy indicator of corridor normalization. Logistics normalization tends to correlate with lower spot volatility for oil delivered to Europe and Asia because shipping risk premia fall; conversely, persistent interruption would sustain an oil risk premium. Given that the Strait of Hormuz channels roughly 20% of seaborne crude (IEA, 2024), movements in container services can act as an early warning for broader maritime congestion or insurance market repricing that affects tankers as well as containerships.

Risk Assessment

Operationally, the reopening is fragile. COSCO's advisory explicitly warned that bookings and operations may face disruption, and brokers report that war-risk premiums were still elevated in late March 2026 (Brokers' market reports, Mar 2026). That combination — conditional service offerings plus elevated insurance costs — means shippers will need to evaluate the reliability of promised sailings against contractual lead times and margin pressures. Time-sensitive cargoes are likely to remain candidates for premium routing or air freight alternatives until the corridor demonstrates a sustained period of safe transits.

For financial counterparties, the short-run risks translate into volatility in freight derivatives (e.g., forward freight agreements) and in carrier equities and credit spreads. A pattern of stop-start operations would pressure carriers' revenue visibility and could widen credit spreads for operators with concentrated Gulf exposure. Conversely, a sustained reopening that reduces war-risk surcharges would likely compress spreads and support carrier equities. The binary nature of the corridor — either serviceable under controlled conditions or effectively closed in practice — amplifies scenario sensitivity for credit and equity analysts.

Geopolitically, escalation risk remains non-trivial. Historical precedents demonstrate that deterring incidents or miscalculation can rapidly reverse any reopening. Market participants should model both a baseline scenario of intermittent reopenings and a downside scenario involving protracted closures that would divert traffic via longer routes and increase bunker and transit costs. Institutional investors should therefore monitor not only carrier advisories but also naval patrol patterns, insurance market statements, and diplomatic channels that can alter the corridor's risk calculus within days.

Fazen Capital Perspective

Our view is that COSCO's move is best read as a calibrated probe rather than a definitive restoration of pre-crisis normalcy. While many market commentators interpret the reopening as a green light, the documented caveats in COSCO's March 25 advisory (COSCO advisory, Mar 25, 2026) and the persistence of elevated war-risk surcharges (Brokers' market reports, Mar 2026) suggest a more nuanced outcome: a de facto two-tier operating environment is emerging in which large, state-backed or vertically integrated carriers run conditional services while smaller or cost-sensitive lines delay re-entry. That bifurcation has implications for slot scarcity, short-term freight rate inflation, and the competitive dynamics among major carriers.

A contrarian implication is that this environment could temporarily favor carriers and ports that can internalize higher insurance costs or negotiate sovereign risk-sharing arrangements — a reason investors should examine balance-sheet capacity, government linkages, and revenue mix more closely than headline routing announcements. For shippers, a tactical implication is that locking in capacity early on conditional reopenings can be a double-edged sword: it secures lift but may carry elevated surcharges and service unreliability. Investors should therefore triangulate carrier advisories with independent port throughput statistics and insurer commentary to form a probabilistic view of corridor normalization.

For macro investors, the reopening reduces the probability of immediate, large-scale supply-chain shocks but not the risk of episodic volatility. A sustained reduction in corridor risk would likely be a supportive factor for regional equities and freight-sensitive industrial sectors; however, until war-risk premiums converge toward baseline levels, expect periodic bouts of repricing in freight markets and selective winners among logistics players.

Outlook

Over the next 30–90 days, market attention should focus on three indicators: (1) actual weekly TEU volumes for primary Gulf ports compared with the pre-suspension baseline, (2) movement in war-risk insurance premiums reported by major brokers, and (3) consistency and frequency of COSCO's announced sailings versus executed sailings. Convergence across these metrics toward pre-crisis norms would signal durable corridor normalization; divergence would imply continued operational friction and a protracted two-tier market.

We expect a cautious expansion of services if no major incidents occur, but not a return to pre-March levels in the immediate term. Carriers are likely to adopt differentiated service offerings: limited direct calls at main hubs and continued reliance on feeders for secondary markets. For investors, sector exposure to carriers with diversified networks and stronger balance sheets will be crucial if the corridor experiences episodic closures that re-route demand elsewhere.

Institutional participants should also monitor geopolitical communications and naval deployments as leading indicators. Diplomatic de-escalation or coordinated escort regimes can materially lower insurer and charterer risk premiums, accelerating normalization. Conversely, asymmetric incidents will reverse the tentative reopening and reprice freight and energy markets quickly.

FAQ

Q: Will COSCO's reopening immediately normalize freight rates to the Gulf?

A: Not immediately. Freight-rate normalization depends on realized capacity rather than booking announcements. War-risk surcharges and route reliability remain elevated as of late March 2026 (Brokers' market reports, Mar 2026), so spot rates and forward contracts are likely to remain volatile until insurers and carriers demonstrate sustained, incident-free operations. Historical precedents show that rates can lag several weeks behind service announcements as market participants test and then either confirm or reject resumed corridors.

Q: How should investors interpret port throughput signals relative to carrier advisories?

A: Port throughput is a more reliable, lagged indicator of actual traffic than carrier advisories, which can be forward-looking and conditional. Compare actual weekly TEU handled at major Gulf ports to pre-suspension baselines; a consistent uptick across multiple weeks is a stronger signal of operational normalization than the reopening announcement alone. For ongoing research, see our logistics risk primers and regional trade analyses at shipping risk primer and Middle East geopolitics.

Bottom Line

COSCO's March 25, 2026 reopening to six Gulf markets is a calibrated, partial signal of route normalization, not a full resumption; insurers and shippers should expect a two-tier operating environment and continuing volatility in freight and energy risk premia. Monitor port throughput, war-risk premiums, and executed sailings over the coming weeks for confirmation.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.