The US-Iran conflict, which began on February 28, 2026, has caused major disruptions in Gulf shipping routes. Textile industry representatives in Pakistan warned that foreign buyers may delay or shift export orders due to increased freight costs and unreliable deliveries. The conflict has led to rerouting of cargo ships through the Suez Canal, avoiding the Red Sea where Houthi threats have heightened.
Carriers have diverted services from the Gulf to the Suez Canal, increasing transit times and costs. This has affected the reliability of deliveries, prompting concerns among exporters. The situation has worsened as the US and Iran continue their military standoff, with attacks spreading across the region.
The crisis began with US and Israeli strikes on Iran, which triggered retaliatory actions against Gulf states and Israel. Hezbollah in Lebanon then launched rockets and drones into Israel, leading to further military escalation. Over 1.2 million people have been displaced in Lebanon as a result of military operations.
Iran has also used the strategic importance of the Strait of Hormuz to seek concessions from the US, offering de-escalation in exchange for relief for the Houthis and greater influence over Gulf shipping. The ongoing instability has created a complex web of threats and negotiations, affecting global trade and regional security.
The situation remains volatile, with no immediate signs of de-escalation. The impact on shipping routes continues to ripple through global markets, affecting countries like Pakistan and raising concerns about the future of international trade in the region.
