A U.S.-Iran memorandum of understanding has raised hopes that shipping through the Strait of Hormuz could gradually recover, but significant challenges remain before trade flows return to normal. At the same time, ongoing security risks in the Red Sea continue to threaten key global shipping routes and commodity supplies.
BNN Bloomberg spoke with Amanda Rastovic, senior forecast analyst at Expana, who said disruptions affecting both the Strait of Hormuz and Red Sea would increase transportation costs, pressure commodity prices and raise the risk of broader inflation in the months ahead.
Key Takeaways
- Shipping through the Strait of Hormuz is unlikely to return to pre-conflict conditions quickly, with demining efforts and security concerns still creating obstacles.
- Simultaneous disruptions in the Strait of Hormuz and Red Sea would affect both energy supplies and global trade routes, increasing shipping times and costs.
- Oil, natural gas, fertilizers, edible oils, proteins, coffee and cocoa are among the commodities most exposed to transportation disruptions.
- Consumers would likely notice higher fuel and energy costs before food inflation, with grocery prices potentially rising after several months of sustained disruption.
- Rising insurance premiums, vessel rerouting, higher freight rates and increasing energy prices would signal a growing risk that supply chain disruptions become a broader inflation concern.
Read the full transcript below:
LINDSAY: A new memorandum of understanding between the U.S. and Iran is raising hopes of easing pressures in the Strait of Hormuz, but analysts say a return to normal could take months, not days. And with the Red Sea still under strain, the risks to global trade and energy markets are far from over. So, joining us now to break it down is Amanda Rastovic, senior forecast analyst at Expana. It’s great to have you join us this morning. Thanks so much.
AMANDA: Thank you, Lindsay.
LINDSAY: So, this memorandum of understanding between the U.S. and Iran, does this meaningfully change anything, or the outlook for shipping through the Strait of Hormuz moving forward?
AMANDA: You know, there was a lot of hope that it would open up a lot of the shipping lanes and get things going. The problem is we’re a long way from actually getting things moving through the Strait at pre-conflict levels. The middle shipping lane, where most of the crude oil and such would be going through, is mined, so they’re having to take a little more precarious route that is open from the U.S. side at this point.
LINDSAY: So, not an immediate return to normal. I wonder, from your point of view, what still needs to fall into place to actually have shipping, insurance and trade flows fully recover, because there are just so many factors here when it comes to these two sides actually reaching an agreement, right?
AMANDA: Yeah, absolutely. I mean, there’s a lot of high tension on each side, a lot of threats going back and forth. Really, this memorandum, it’s a good start, but we need to get in. They need to demine the Strait before we can actually see that happen. And the issues between Lebanon and Israel right now, that’s causing some issues as well, even though they are not actually part of the discussion of the memorandum right now.
LINDSAY: You’re also watching the Red Sea. How significant is the risk of disruption happening in both the Strait of Hormuz and the Red Sea at the same time? And also, fill us in on what you’re watching for there.
AMANDA: Yeah, absolutely. So, those are going to be two of your main shipping arteries in that area, with the Suez Canal. You typically see about 30 per cent of global container trade go through that route, and then on the Hormuz side, you have 20 per cent of the world’s oil. Typically, we only have an issue in one or the other, so there are other opportunities and areas for ships to go. If there’s going to be an issue on both sides of that, you’re going to start seeing ships reroute. That’s going to add time, that’s going to add cost to transport. A lot of those routes, you know, they’re going to have to go around the Cape of Good Hope. That’s going to add 10 to 14 days, or about 3,000 miles, to that journey to get those commodities to their port of destination.
LINDSAY: I think most of us remember what happened with the Suez Canal a couple of years ago during the pandemic, so we wouldn’t want to see that again. But can you fill us in on why you’re watching tensions around maybe a potential closure in the Red Sea? What would be causing that?
AMANDA: Yeah, well, the Houthis have already said that they’re going to start targeting U.S., Israeli and Israeli-linked ships in that area. In the past, they haven’t had a really good track record of actually sticking to those countries that they are targeting, so really it becomes a problem of insurance for countries that really don’t have anything to do with this. Whenever you’re looking at one of these container ships, it can be owned by one country, flagged by another, carrying goods for another. I mean, there are a lot of countries involved in just one ship. So, for the Houthis to just blanket say that they’re going to target these two countries, that’s easier said than done. In the past, they have targeted ships that may not have actually fallen under that threat.
LINDSAY: From a broader perspective, why does it matter that Hormuz is an energy chokepoint while the Suez Canal and the Red Sea are trade routes?
AMANDA: Well, because they are extremely important to the movement of commodities as a whole. So, if we’re going to have chokepoints at both of those areas, it really slows down the recovery of anything that does get settled between the U.S. and Iran. It’s going to take a lot of time to get it going again. I mean, some of these areas that have been hit in Saudi Arabia, et cetera, some of these plants that they’ve hit, they could take six to 18 months to rebuild and actually get things going, to actually be shipping out things like aluminum. That’s not something that you can just turn the plant back on and get started again. It takes a lot of time. And if we’re having issues on both sides of the Suez and the Strait of Hormuz, we’re really limiting the trade routes into the Asia region of the world.
LINDSAY: From a pricing perspective, though, how would disruptions on each side impact prices differently?
AMANDA: Oh yeah, we’re definitely not going to see shortages right away. That’s going to take months. What we’re going to start seeing is higher gas prices. That’s something that’s going to happen pretty quickly if those disruptions do happen. As far as food price sensitivity, that’s going to maybe take another couple of months, possibly a quarter or two, before we start to see prices increase on those products. A lot of times companies can absorb those price increases, but if it goes on for more than a quarter or two, then we’ll start to see higher prices in the grocery stores as well.
LINDSAY: Is that because, I was going to ask, what could consumers notice first if these disruptions continue? Is it higher prices in the grocery store?
AMANDA: It’s definitely going to start with oil and natural gas, and then it’s going to move into food as well, because food, proteins, edible oils, coffee, cocoa, all of those are very transportation-sensitive, and so that’s where we’re going to see that happen first.
LINDSAY: What are you watching to determine whether this actually becomes even more of an inflation story?
AMANDA: Yeah, so we’re going to be watching war-risk insurance premiums. We just heard that Lloyd’s of London is making kind of a conglomerate with Chubb to go ahead and offer these premiums to ships in that area. So we’re going to watch that. We’re going to be watching the number of vessels that are moving through the different straits and canals in the area to see how ships are moving, and if we’re starting to see ships take different routes. We’re going to be watching container and tanker rates. We’ve already seen a pretty large increase in those rates already. We’re going to see oil and LNG prices increase, and then we’re going to be watching fertilizer. A lot of fertilizer comes from that area, mainly urea and ammonia. That’s going to be about 20 per cent, and then about 50 per cent of sulfur comes from that region as well. So those are going to be the main areas we’re looking at, where it becomes less of a security risk and more of an inflation risk.
LINDSAY: Wow, okay, a lot to watch for there. Amanda Rastovic, senior forecast analyst at Expana. Really appreciate your time. Thanks for joining us.
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This BNN Bloomberg summary and transcript of the June 22, 2026 interview with Amanda Rastovic are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
