Strait of Hormuz closure: what it means for Japanese used car shipping costs

The Strait of Hormuz is the narrow sea passage between the Persian Gulf and the Gulf of Oman. Roughly a fifth of the world's seaborne oil and a large share of LNG move through it every day, which is why any threat to close it sends an immediate shock through global energy and freight markets.

Japanese used cars bound for East and Southern Africa do not physically sail through Hormuz. RoRo (roll-on, roll-off) vessels leave ports such as Yokohama, Nagoya and Kobe and cross the Indian Ocean to Mombasa, Dar es Salaam and Durban. But the cost of running those ships is tied to the global price of bunker fuel, and bunker prices track crude oil closely.

When the strait is blockaded or even seriously threatened, crude can spike by double digits within days. Shipping lines pass this through as a higher Bunker Adjustment Factor (BAF) or an emergency fuel surcharge, so the freight portion of your CIF quote rises even though the route never touches the Gulf.

Buyers shipping to the Middle East itself, including Jebel Ali, Bandar Abbas and other Gulf ports, are exposed directly. War-risk insurance premiums climb, some carriers suspend Gulf calls, and transit times stretch as vessels wait for safe windows or reroute. For these destinations a closure can mean both higher cost and weeks of delay.

There is also a knock-on effect through the Red Sea and Suez Canal, the gateway for cars heading to the Mediterranean and Europe. When Gulf tension coincides with Red Sea disruption, carriers divert around the Cape of Good Hope, adding roughly 10 to 14 days and a fresh layer of surcharges to Europe-bound shipments.

Practical advice for importers during a Hormuz scare: lock in a CIF quote in writing with the surcharge stated, ask whether your booking is exposed to BAF revisions before sailing, and build an extra two to four weeks into your delivery expectations. Because FOB prices in Japan are set at auction and are unaffected by the strait, buying earlier and holding the unit can sometimes beat waiting for freight to settle.

ASTONISHING CARS monitors bunker indices and carrier surcharges weekly and quotes CIF with the fuel component itemised, so you can see exactly how much of a price move is the car and how much is the current freight environment.