US and Israel strikes on Iran – gloomy implications for Mid-East repair yards

Regional hostilities are likely to have significant implications for Gulf and other Middle East repair yards as shipowners continue to steer clear of the region. Joint military strikes by the US and Israel against Iranian targets in recent days have severely reduced prospects for container shipping returning to Red Sea routes in 2026, according to market analysis from Xeneta. Meanwhile container lines are adjusting Gulf schedules following various attacks on ships in recent days.
Peter Sand, chief analyst at Xeneta, said the escalation and subsequent Iranian retaliation would further weaponise global trade flows and undermine recent carrier plans to resume Suez Canal transits after diversions around the Cape of Good Hope.
“The repercussions of the joint military operation by the US and Israel against Iran and subsequent retaliatory action will see the further weaponisation of trade and shatter hopes of a large-scale return of container shipping to the Red Sea in 2026,” Sand said.
He added that renewed attacks by Iran-backed Houthi militia now appeared likely, forcing carriers to prioritise crew and vessel safety and abandon phased service returns. Sand noted that operators had already reacted, citing CMA CGM’s withdrawal of Red Sea services and Maersk’s decision to reroute ME11 (Middle East/India to Mediterranean) and MECL (Middle East/India to East Coast US) services via the Cape of Good Hope.
Longer diversion routes continue to absorb around 2.5 million TEU of global container capacity, sustaining freight rates despite weakening demand. Xeneta reported average spot rates from China to US, and European trades had fallen between 23% and 35% since the start of 2026 but remained significantly above pre-crisis levels.
For Middle East shiprepair yards, prolonged diversions are likely to shift maintenance demand westwards toward Mediterranean and African hubs, while Gulf facilities may experience more short-notice repairs linked to operational stress, accelerated maintenance cycles and congestion-driven schedule disruptions as vessels minimise regional exposure.