Hormuz Rerouting Doubles Cape Traffic Without Delivering a Windfall
Since February, Iran has effectively closed the Strait of Hormuz following U.S. and Israeli attacks, prompting major shippers to reroute vessels around the Cape of Good Hope. Although traffic around southern Africa has roughly doubled, the expected boost to local ports from bunkering, repairs and cargo handling has not materialized, with most transiting ships not calling at regional harbors.
Why It Matters
The rerouting raises costs and operational risks for global shipping while shifting security, environmental and infrastructure burdens onto Southern African states. The mismatch between increased passage and limited port revenues underscores weaknesses in regional logistics and potential exposure as new energy projects expand along the coast.
Key Facts
- Start of diversion: February (after U.S. and Israeli attacks on Iran)
- Traffic change: Traffic around Cape of Good Hope doubled since the war erupted
- Additional trip distance and time: Around 5,000 miles longer, about 14 extra days
- Additional fuel cost estimate: More than $1 million per trip
- Port performance ranking source: World Bank and S&P Global Market Intelligence Container Port Performance Index (CPPI)
Shipping through the Strait of Hormuz has fallen to a near standstill in the seven months since U.S. and Israeli attacks on Iran, prompting major carriers to send vessels around South Africa’s Cape of Good Hope. Observers report that vessel traffic around the southern tip of Africa has roughly doubled since the conflict began in February. However, the hoped-for economic upside for Southern African ports — including increased bunkering, repairs and cargo-handling business — has not followed.
The principal reason is that the Cape detour significantly lengthens voyages: the route adds about 5,000 miles and roughly two weeks to a trip, with an estimated extra fuel cost exceeding $1 million per voyage compared with Middle East and Suez corridors. Faced with those added costs and delays, many ship operators choose to remain in transit through South African waters rather than call at ports such as Durban or Cape Town.
Operational limitations at South Africa’s major harbors compound the problem. In the most recent global Container Port Performance Index co-published by the World Bank and S&P Global Market Intelligence, Cape Town ranked last out of 400 ports, a position the World Bank linked to frequent weather disruptions, equipment failures and low berth utilization. Durban ranked 398th. South Africa’s state-owned logistics firm Transnet continues to face equipment shortages, aging cranes, constrained container capacity and inadequate rail links, which push more freight onto trucks and increase congestion around ports.
Those conditions mean Southern African nations are bearing higher costs without capturing equivalent commercial benefits. Governments are spending more on maritime surveillance, search-and-rescue and emergency response as transit traffic increases, while piracy and spill risks have risen alongside heavier crude, fuel and LNG tanker movements. Regional energy markets are also affected: importers in Southern Africa are paying more for fuel and competing with Asian buyers for West African supplies, which has pushed tanker rates higher and raised replacement costs.
At the same time, the energy-sector response has attracted big projects and investment into the region. Major LNG developments have restarted or expanded — including the resumed Mozambique LNG project led by TotalEnergies, ExxonMobil’s Rovuma LNG initiative, and proposed projects in Tanzania — and pipeline plans such as the Dangote Southern Africa Corridor Pipeline have been floated. These projects could increase export revenue and infrastructure spending but also concentrate new energy infrastructure along coastlines now facing heightened security and environmental risks.