Iron ore shipments are being disrupted by the worsening conflict in the Middle East, with some cargoes diverted mid-voyage to East Asia as war chokes one of the world’s most critical shipping lanes.
At least three cargoes of iron ore mined by London-based Anglo American Plc, and two from Brazil’s Vale SA, have had their destinations changed, according to ship-tracking data from analytics company Kpler.
Middle Eastern steelmakers rely heavily on imports of premium iron ore for the pellets used in direct reduced iron production — a lower-emissions method of making the precursor of steel. Oman and Bahrain are key pellet producers in the region, and the war is likely to tighten the market for higher-grade concentrates and pellets compared to other types of ore.
“The current geopolitical instability exposes a clear vulnerability in an already concentrated supply chain,” said David Cachot, research director at Wood Mackenzie Ltd. “Disruption to pellet feed inflows or pellet exports from these facilities would quickly ripple through” the DRI sector, he said.
Vessels Attacked
Kpler’s data show Anglo’s Cape Shangrila vessel changing course from Bahrain to Singapore, while the Cape Jasmine is now headed to Vietnam instead of Bahrain and the Mineral Zimbabwe has switched from Oman to Qingdao in China. Two Vale ships bound for Oman have also been diverted, to China and Malaysia respectively.
Anglo and Vale didn’t immediately respond to requests for comment. Other vessels have been forced to pause their journeys outside the Arabian Gulf, according to the Kpler data.
The diversions underscore how the war is scrambling trade flows across commodities markets. Maritime traffic through the Strait of Hormuz has almost completely stopped due to Iranian attacks on vessels in the days since the US and Israel launched strikes against the country.Macquarie Group estimates DRI production across Gulf nations totaled around 14 million tons in 2025. Bahrain is a both an importer of pellet feed and a key exporter of pellets, while Oman is a larger pellet exporter with a Vale plant based in Sohar.
“The war in the Middle East has significantly tightened iron ore pellet supply,” said Kpler analyst Alexis Ellender, with implications for steelmakers in the world’s largest market. “China has already lost the 10 million tons per year of iron ore pellets it was getting from Iran, and pellet output in Bahrain and Oman is threatened,” he said.
Benchmark iron ore futures rose as much as 1.3% to $105.55 a ton in Singapore, the highest since mid-January. Elevated freight and bunker rates because of the war have also raised the cost of shipments.
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