On June 7 and 8, Israel and Iran exchanged missile strikes for the first time since a ceasefire agreement went into effect on April 7, 2026. The two countries have since announced an end to their respective military strikes; however, regional tensions remained high.
Iran threatened to retaliate again if Israel continues its military offensive against Hezbollah in Lebanon. Israel maintains that any peace agreement agreed to by the U.S. and Iran would not include its conflict with Hezbollah, while Iran reportedly considers a complete cessation of hostilities in Lebanon a central, non-negotiable part of permanently ending the regional conflict.
Following the halt in hostilities between Israel and Iran, U.S. President Trump publicly claimed that negotiators to end the conflict were close to reaching an interim agreement.
However, tensions between both sides flared up again after President Trump accused Iranian forces of downing a U.S. Army Apache helicopter off the coast of Oman on June 9. The U.S. military conducted strikes against Iran’s air defense systems, radar sites, and ground control stations on the same day, and Iranian forces retaliated with strikes on U.S. military assets in Jordan, Bahrain, and Kuwait the next day.
The U.S. exchanged another round of strikes on the evening of June 10 and shot down two Iranian drones on the evening of June 11. President Trump has also claimed that the U.S. could take control of Iran’s Kharg Island and other critical oil infrastructure points. Yet, on June 12, President Trump again announced that a peace deal with Iran was imminent.
Pakistan’s Prime Minister Shehbaz Sharif has since confirmed that the U.S. and Iran have reached an interim agreement to immediately and permanently end all military operations in the region, including in Lebanon, and reopen the Strait of Hormuz. The interim agreement is expected to be signed on June 19 in Switzerland. At the time of writing, the timeline for the strait’s reopening remains unclear and no details have been provided on how shipping traffic through the waterway will be managed going forward. According to Iranian sources, the U.S. has also agreed to lift its blockade of Iranian ports within 30 days.
Despite these diplomatic breakthroughs, uncertainties remain. Members of the Israeli Government have publicly criticized the alleged agreement, and it wasn’t immediately clear whether the Lebanon-based militant group Hezbollah would adhere to the peace terms agreed to by the U.S. and Iran. The U.S. and Iran are also expected to continue negotiations over a number of protracted issues during a second round of talks set to take place in the next 60 days, including the future of Iran’s nuclear program and the possibility of sanctions relief for Iran.
Air and ocean transport remain disrupted due to Middle East regional conflict
Despite two months of peace negotiations, including the resumption of activity through the Strait of Hormuz as a key pillar, commercial traffic through the crucial waterway has remained disrupted. In the days leading up to the recent escalation in hostilities between Israel and Iran, only a small number of ships were believed to have transited through the strait, although the total number could be higher if ships switched off their transponders to avoid detection prior to entering the waterway, an increasingly common strategy for carriers to maintain operational continuity, referred to as ‘dark transit’. Following the latest round of military strikes, Iran had announced a complete closure of the strait again.
In a further blow to ocean shipping in the Middle East, the Houthis, a Yemen-based militant group, announced on June 8 that they would impose a ban on all Israeli ships traveling through the Red Sea in response to escalating regional tensions. The group did not specify how they intended to implement the ban but warned that all vessels linked to Israel would be considered legitimate military targets.
Cargo volumes through the Red Sea have experienced a partial recovery this year, including containers, oil, liquefied natural gas, raw materials, food, industrial products and spare parts. Daily vessel crossings through the waterway have averaged 37 ships per day – down from the average of 80 before the conflict. This is in part due to carriers using the Red Sea as a crucial alternative route during the near closure of the Strait of Hormuz, particularly with regards to oil exports out of Saudi Arabia’s seaport in Yanbu. The east-west pipeline that serves the oil port is now operating at full capacity, moving 7 million barrels per day, compared to just 2 million barrels per day prior to the war.
Air transport into and out of the Middle East also remains prone to sudden disruptions as tensions in the region remain elevated. The recent flare-up in hostilities quickly caused widespread flight disruptions in the region as several countries closed their airspaces due to security concerns. Syria, Iraq, and Kuwait all announced temporary airspace closures as regional tensions flared but have since rescinded the measures.
Officials in Iran suspended flights to and from at least five of the country’s airports, including the Imam Khomeini International Airport (IATA: IKA) near Tehran, while authorities in Israel planned to scale back passenger and flight numbers at the Ben Gurion International Airport (IATA: TLV) in Tel Aviv in response to heightened tensions in the region. Flight operations from the Imam Khomeini International Airport (IATA: IKA) have reportedly resumed, though the strikes have caused sudden airspace closures which can disrupt flight schedules at short notice.
Even if all affected airports resume operations, flight traffic in and out of the Middle East is likely to remain curtailed in the coming months after several major international airlines extended flight cancellations to the region in early June. Among the airlines that have extended flight cancellations are the flag carries of France, Germany, the United Kingdom, Japan, and Hong Kong.
The impact of aviation fuel shortages caused by the conflict also appears to be worsening, with American Airlines, one of the biggest airlines in the U.S., temporarily cutting several domestic flight routes because of rising fuel costs. Overall, airlines are expected to spend an additional $100 billion (€86 billion) on jet fuel this year, with prices expected to be around 70% higher in 2026 due to the Middle East crisis. Despite the overall price increase, a representative of the International Air Transport Association (IATA) noted that a shortage of jet fuel was no longer expected to materialize.
Shortages worsen as Strait of Hormuz remains disrupted
Shortages of energy and raw material supply have continued to worsen as the Strait of Hormuz remained closed for most shipping traffic. While the business impacts of the closure have been felt across the world, companies in Japan continue to be among the most exposed due to the country’s reliance on energy and raw material imports from the Middle East.
In recent weeks, many companies in the building materials and construction sectors were forced to curtail customer orders due to raw material shortages, including Joto Techno Co., Ltd. and IG Kogyo Co., Ltd.
Japanese automotive manufacturers are increasingly struggling to secure enough aluminum amid tightening supply and rising prices for available stock. Japanese food and beverage companies are facing a shortage of ethylene, which could impact the availability of fruits such as bananas, as ethylene gas manipulates the ripening process during transport and distribution.
Despite the recent diplomatic breakthroughs, material and energy shortages are likely to persist across many parts of the worlds in the short-term as the terms and timeline of the waterway’s reopening remain unclear.
Ocean carriers will likely remain reluctant to send their ships through the strait as long as it is not clear how traffic flows through the waterway will be managed going forward. Following the sudden bouts of military strikes in recent weeks, security concerns could also remain a major deterrent for many ship owners as they consider resuming transits through the Strait of Hormuz. As a result, it could still take weeks for shipping traffic to resume fully, even if the Straif of Hormuz officially reopens for shipping traffic in the coming days.
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.