MID-SHIP Report: Dry Bulk Freight Market – April 1, 2026
April 1, 2026
If a person did not know where or what the Strait of Hormuz was 4 weeks ago, they definitely know where it is by now as well as the impact that it is having on the world economy and daily life for the majority. Many of us have started to use the acronym “SOH” in daily correspondence given the number of times it is referred to.
While there are a limited number of ships still transiting the SOH daily with Iranian clearance/right of safe passage, only a fraction of the goods normally transiting the Strait continue to do so. Most/all ships receiving safe passage belong to jurisdictions that have approached Iran as either sympathetic to their position or have a strictly neutral position in the hope of assisting to resolve the conflict. A considerable focus is on getting ships trapped in the Arabian Gulf out so that outbound cargoes can be delivered to market and to free up non-tradeable assets while they sit in hostile waters waiting for a resolution. The impact to the reduction of trade has had considerable effects on the global oil, LNG, aluminum, steel and fertilizer industries. Even less obvious trades such as that for helium have been impacted.
While both Saudi Arabia and the UAE have been successful in expanding alternative logistics routes that mitigate ships having to transit the SOH (ie the Red Sea and Arabian Sea respectively), there is a limit to the volumes that can be redirected. Also, other economies, ie Bahrain and Qatar, are effectively cut off from world trade for the duration of the conflict – at least for now.
Bunker fuel costs continue to be the big question mark to ship owners pricing forward cargoes. Without a secure bunker option and price for available supply, ship owners are holding back on rating new business firmly. Oil prices have continued to swing violently as news out of Washington, and other players in the conflict, either indicate an escalation of action or the belief in a quick resolution. If the conflict continues into April and May, there is speculation that oil could rise to closer to USD 150 per barrel in spikes with the floor being closer to USD 90 and an average pricing being closer to USD 115/120 until the SOH transit is resumed for oil tankers. In this scenario, refined products (including bunker fuels) could see pricing rise by up to 200% of pre-war levels.
When tracking actual market rates for dry bulk cargoes, while there is neutral to positive sentiment for the larger carrier segments – cape and panamax – rate increases across the board have mostly been a result of the fuel price increases or direct trading limitations being created by the war. Remember that only about 3% of global dry bulk trade transited the SOH before the war so the global impact to supply of ships is not driving the pricing needle. Rather, we are seeing the rebound in coal pressing forward modest gains for the larger segment ships aided by modest increases in iron ore movement for increased steel production requirements. The trend for smaller bulk trades has been weaker, particularly in the Atlantic, resulting in flat to slight decreases for vessel pricing in the Supra and Handy segments. Many in the minor bulk trades see the increased transportation (ie fuel) costs reducing their ability to transport cargo for long-haul trades in favor of shorter regional trades that make better sense for CFR pricing on expensive base products. This in turn reduces vessel utilization and causes rates to sag a bit.
A big concern for the forward market remains how the world fertilizer markets (and the resulting grain harvests), will manage with a 40% reduction in sulphur and urea supply as a result of the SOH closure. This supply crunch could see a major redirection or increase in seaborne shipments in Q3/Q4 2026 and we have to watch that space closely. Similarly, if the conflict were to be quickly resolved, we could expect to see a rapid market resurgence as trades become possible/viable again and we seen trades that have been slow rebound.
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