A day before the initial ceasefire agreement was set to expire, U.S. President Donald Trump announced on April 21 that he would extend the temporary truce indefinitely to give Iran more time to submit another peace proposal and for negotiations to conclude. The U.S. President also confirmed that a naval blockade of Iran’s ports will remain in place until further notice.
Despite the ceasefire extension, the status of further peace negotiations remains unclear. JD Vance, the U.S. Vice President, has reportedly put a trip to Pakistan, where the next round of talks was set to take place, on hold after Iranian representatives refused to attend, citing what they perceive as unreasonable demands from the U.S.
Meanwhile, a 10-day ceasefire between Israel and Hezbollah in Lebanon seems to be holding almost a week after it went into effect on April 16. Prior to the temporary truce, disagreements over the conflict in Lebanon had threatened to jeopardize peace negotiations between the U.S. and Iran, with the former claiming that Lebanon was not part of the initial ceasefire, while the latter insisted that it had to be included if any permanent peace deal is to be reached.
Strait of Hormuz closed again for commercial traffic following brief reopening
Two weeks into the ceasefire between the U.S., Israel and Iran, vessel traffic through the Strait of Hormuz remains well below pre-conflict transit levels, with only a limited number of ships sailing through the narrow waterway since fighting in the region came to a halt.
On April 17, authorities in Iran had initially announced that the Strait of Hormuz would reopen for all commercial shipping traffic after a ceasefire between Israel and Lebanon-based Hezbollah went into effect a day earlier. However, less than a day later, the Iranian military announced that the strait was closed again and vessel traffic will remain suspended until the U.S. lifts its naval blockade.
According to a statement by the U.S. military’s Central Command, the U.S. Navy turned back almost 30 vessels attempting to enter or exit Iranian ports by last Monday. Notably, the Navy also seized and disabled an Iranian cargo ship in the Gulf of Oman on April 19, allegedly because it tried to evade the U.S. naval blockade.
Meanwhile, Iranian forces have been accused of shooting at two India-flagged tankers trying to transit the Strait of Hormuz on April 18.
Three more vessels were reported to have come under fire from the Islamic Revolutionary Guard Corps (IRGC) on April 22, with the Iranian navy claiming that it had seized two of the affected cargo ships in the Strait of Hormuz. The vessels are believed to be the cargo ships Euphoria, Epaminondas, and MSC-Francesca, with the latter two being seized by Iranian forces.
The Naval Command of the IRGC has since announced that both ships would have their documents and cargo inspected, but it wasn’t clear whether the vessels would be allowed to exit the Strait of Hormuz after the inspections conclude.
Growing number of airlines adjust flight schedules in response to jet fuel shortages
Flight traffic in and out of the Middle East has remained curtailed over the last two weeks, but regional air traffic is showing signs of improvement as local authorities reopen airspaces and ramp up operations at regional airports.
Most recently, the Civil Aviation Authority of Qatar announced on April 21 that the country’s airspace will gradually reopen to foreign airlines via the Hamad International Airport (IATA: DOH) in Doha. Qatar Airways, the country’s flag carrier, as well as its cargo division Qatar Airways Cargo, had already resumed a limited number of flights in March.
A day earlier, authorities in Iran announced that flights have been allowed to resume at two airports in the capital Tehran. From April 21, international flights will resume from the Imam Khomeini International Airport (IATA: IKA), while domestic flights will resume from the Tehran Mehrabad International Airport (IATA: THR). Flights from other major Iranian cities are expected to restart over the coming weekend.
Despite the temporary ceasefire, numerous international airlines have maintained or even extended flight cancellations to and from the Middle East. Among the airlines that have extended flight cancellations since the ceasefire went into effect are Latvia-based airBaltic, Finland-based Finnair, Poland-based Lot Polish Airlines, and Hong Kong-based Cathay Pacific Airways.
Philippine Airlines, the flag carrier of the Philippines, restarted flight services between its main hub in Manila and Saudi Arabia’s capital Riyadh from April 10, albeit via an alternate flight route with an additional refueling stop in Bangkok to avoid high-risk areas. The carrier’s flight connections to Doha in Qatar and to Dubai in the United Arab Emirates are expected to remain suspended until the end of May due to continuing flight restrictions in parts of the Middle East.
Recent reports also suggest that British Airways is making permanent changes to its regional flight schedule in response to the crisis, including completely cutting the daily flight to Jeddah in Saudi Arabia from April 24 and reducing the frequency of flights to Riyadh from mid-May. Flight services to Dubai, Doha, and Tel Aviv in Israel are set to resume at a reduced rate from July. The schedule changes will reportedly apply throughout the rest of the summer season, which ends in late October.
Flight cancellations are also continuing to spread in other parts of the world as airlines face rising fuel costs and growing jet fuel shortages.
The International Energy Agency (IEA) warned that Europe is at risk of running out of jet fuel by June if the continent cannot replace roughly half of its Middle East imports with shipments from other countries by then. According to the IEA, around 75% of Europe’s jet fuel imports came from the Middle East prior to the war. KLM Royal Dutch Airlines confirmed in mid-April that it will cancel around 160 flights across Europe in the coming month due to rising fuel costs.
Disruptions are also worsening in the Asia-Pacific region, where Air New Zealand announced flight cancellations for May and June. The measure is expected to mainly target flight routes in and out of Auckland, Wellington, and Christchurch.
Hong Kong’s flag carrier Cathay Pacific is reportedly cutting around 2% of its passenger flights between mid-May and the end of June, while Vietnam Airlines is currently planning to cut 23 flights per week from April, according to the country’s aviation authority.
In the U.S., Delta Air Lines, one of the country’s biggest carriers, is planning to reduce its flight capacity by around 3.5% and has suspended all capacity growth it had planned to implement during the first quarter of the year. Across the world, many airlines have also announced plans to increase ticket prices and hike fuel surcharges in an effort to offset the rising fuel costs.
Raw material shortages in Asia worsen as Strait of Hormuz remains largely closed
As the Strait of Hormuz remains closed for almost all vessel traffic, shortages of raw materials such as aluminum and naphtha have continued to worsen in parts of the world despite the ceasefire agreement announcement in early April.
Prior to the conflict, companies in the Middle East accounted for almost 10% of global aluminum production, most of which was shipped through the Strait of Hormuz. Even if the waterway reopens soon, disruptions to the supply of aluminum are expected to last well into 2027. Two aluminum smelters in Bahrain and the United Arab Emirates were hit by Iranian strikes before the ceasefire, and Emirates Global Aluminium (EGA), the Middle East’s biggest producer, estimates that it could take up to a year to restore pre-conflict production levels at its Al Taweelah smelter in Abu Dhabi due to the extensive damages the site sustained during an Iranian attack in late March.
The price for aluminum has increased by around 13% since the beginning of the war on February 28, with manufacturers in Japan being among the most exposed to the shipment disruptions so far. According to the Japan Aluminum Association, Japan imported roughly a third of its total aluminum supply from the Middle East in 2025. With around 70% of their aluminum supply coming from the Middle East, Japanese automotive companies will be among the worst hit if the supply disruptions persist. Kato Light Metal Industry Co., Ltd., a manufacturer of aluminum extrusions for construction and automobiles, warned as early as late March that it will likely struggle to meet the supply needs of its automotive customers if shipment delays continue.
In March, Denso Corporation, one of the world’s biggest automotive suppliers, confirmed that it was forced to cut its monthly output by around 20,000 units but did not provide details on what manufacturing sites or products have been affected by the cuts.
Nissan Motor Co. has reportedly made changes to its manufacturing and logistics operations to address supply disruptions. Toyota Motor Corporation has also adjusted its manufacturing output in recent weeks in response to the crisis in the Middle East but declined to comment on what role component or raw material shortages played in the decision. With many companies in Japan believed to maintain around two months’ worth of inventory of critical parts and raw materials, operational impacts in sectors such as automotive, construction, or packaging could worsen significantly from May.
In addition to the aluminum shortage, concerns over a potential shortage of naphtha, an oil derivative and raw material used in the making of plastics, are growing in Japan and other countries.
In mid-April more than a dozen companies in Japan warned of price hikes, delivery delays, and production reductions due to the worsening shortage, including in industries as diverse as chemicals, electronics and furniture making. Prior to the crisis, Japan imported around 40% of its naphtha supply from the Middle East.
Raw material shortages related to the conflict in the Middle East have also intensified in other parts of Asia. Disruptions in crude oil supply have caused a shortage of polyethylene terephthalate (PET) in Malaysia, with some manufacturers hiking plastic prices by 15% to 40%, according to the Malaysia Plastic Manufacturers Association.
In Indonesia, worsening sulphur supply shortages have impacted the country’s crucial nickel mining industry. As a result of the shortage, several nickel processors affiliated with firms including Huayou Cobalt Co., Ltd., Lygend Resources & Technology Co Ltd., and Tsingshan Holding Group Co., Ltd. had to cut production by at least 10% since March. Indonesia is the world’s largest nickel producer and sources around 75% of its sulphur imports from countries in the Middle East.
Everstream clients are receiving more detailed insights and recommendations about this risk.
Don’t miss key supply chain risk updates! Subscribe now to get supply chain news, weather updates, forecasts, and other insights.