Oil exporting companies in the Persian Gulf, following the ongoing crisis between the United States and Iran, have been compelled to make significant changes in their supply chains. With difficult access to the Strait of Hormuz, these companies have turned to alternative ports, leading to a substantial increase in costs and transportation times.
Port Performance in the Gulf Cooperation Council
According to published reports, as of September 14, only 9 out of 24 major ports in the Gulf Cooperation Council countries are operating normally. Active ports include Khor Fakkan and Fujairah in the United Arab Emirates, Sohar, Salalah, and Duqm in Oman, as well as the Islamic port of Jeddah, Port Abdullah, Yanbu, and Jazan in Saudi Arabia. In contrast, key ports such as Jebel Ali and Khalifa in the UAE, Dammam and Jubail in Saudi Arabia, Hamad in Qatar, and Shuwaikh in Kuwait are facing difficulties due to operational restrictions or difficult access.
Use of Alternative Ports
In response to these limitations, companies have begun using distant ports that do not pass through the Strait of Hormuz. For example, transportation from Khor Fakkan port in the UAE to Dubai and Abu Dhabi is taking place, or cargo is being transferred from Sohar port in Oman to various Gulf Cooperation Council countries. Salalah port in Oman, which is about 1,200 kilometers away from the strait, is considered a relatively safe option, but the high costs of land transportation pose a major challenge.
Delivery times for cargo have significantly increased, reaching about 45 to 60 days to arrive in the UAE and 8 to 10 weeks to reach Saudi Arabia. Additionally, reports indicate that cargo can take up to 4.5 months to reach Algeria.
With rising logistics costs due to the prolonged war, domestic companies are once again under pressure. In August, the Shanghai Containerized Freight Index reached 3,409.6, nearly 2.5 times higher than at the end of February when the crisis began. This increase in costs is attributed to war fees, fuel fees, and port traffic fees.
Under these circumstances, South Korea's exports to the Middle East last month reached $1.19 billion, reflecting a 15% decrease compared to last year.
