Freight up 250%. Oil back to $73.
The strait explains the gap.

A shipper booking a forty-foot container from Asia to the US West Coast this week pays around $6,639. That is up 14% in a week and roughly 253% above where the lane sat before the Strait of Hormuz crisis began in late February (Freightos weekly update data, July 3, 2026). The fuel in that ship's bunkers costs about what it did before the war: Brent settled near $73 a barrel this week, back at prewar levels after touching $120 in March. Freight has tripled while its largest input cost has round-tripped to normal. That gap is the story of this market.

Why are container rates rising when fuel is cheap?

Because the market is short capacity, not long costs. Drewry's World Container Index rose 9% in the week to July 2, to $4,530 per FEU, 61% higher than a year ago (Drewry WCI, July 2, 2026). None of that is a fuel surcharge working through the system. The driver is arithmetic. With Hormuz effectively closed since late February and Suez transits down roughly 40%, vessels are sailing longer routes, and a ship that spends more days at sea completes fewer voyages. Industry estimates put the effective capacity loss at 15 to 20% of the global container fleet. The ships still exist. Their voyages don't.

The timing made it worse. European buyers pulled forward orders of photovoltaic modules, batteries and EVs ahead of regulatory deadlines, and World Cup merchandise landed in the same window. Demand that would normally spread across a third quarter arrived compressed into June. Carriers did what carriers do in a seller's market. Eight blank sailings were announced on the Transpacific in a single week, general rate increases went out across the board, and peak season surcharges are stacking on top of those. HMM's alone is $3,000 per FEU, effective July 15.

The squeeze is sharpest where the equipment is. Longer round-voyages mean empty containers return to Asia weeks late. The deficit is concentrated in Vietnam, Malaysia and India, the origins that absorbed sourcing diversification away from China over the past two years and the ones with the least infrastructure to buffer a box shortage. Rates out of Southeast Asian ports are climbing on volumes those terminals were never sized for, the same lanes that carry the Pakistan-origin flows tracked in our export intelligence dashboard. We covered the demand side of this dynamic in our June commodity markets update; the freight side now compounds it.

Is the strait actually reopening?

Partially, and unevenly. Under the preliminary US–Iran deal, a UN-approved corridor along the Omani coast has pulled transits back to roughly a third of prewar levels. Around 36 vessels crossed on Monday July 6, against a handful a day during the war and about 84 normally (Kpler, July 6, 2026). Crude flows through Hormuz recovered to some 8 million barrels a day in early July, half of prewar volumes. Gulf producers have rebuilt much of the rest through bypass pipelines: UAE exports were back near 85% of prewar levels by early June (WSJ, July 7, 2026).

Then came this week. Iran's Revolutionary Guard fired missiles at two commercial ships and sent a drone into a third near the strait on July 7. The US struck Iranian missile and radar sites in response and revoked the waiver that had allowed Iranian oil sales (New York Times, July 7, 2026, "U.S. Strikes Iran and Reimposes Sanctions in Retaliation for Tanker Attacks"). Tehran's demand remains on the table: vessels should seek Iranian approval, use Iranian-controlled routes, and eventually pay tolls. Its internal politics have hardened since the funeral of Ali Khamenei, killed in an Israeli strike at the war's outset, brought crowds into the streets chanting against the negotiators. Iran's leverage erodes as workarounds multiply, which is why the attacks continue. A chokepoint loses value the moment traffic learns to route around it.

What is the market pricing in, and what is it missing?

Prediction markets put the odds of Hormuz traffic returning to normal, defined on Kalshi as a seven-day average above 60 transits, at 58% before August 1 and 75% before year-end (Kalshi, July 6, 2026). That August figure was priced after the deal announcement on July 5 and largely before Tuesday's attacks. It reads rich against the observed data, which shows tanker traffic recovering while container lines, with mega-ships and crews to protect, hold back.

The structural lag matters more than the headline odds. Even a durable political settlement leaves mines to clear and a backlog of idled ships to unwind (Washington Post, June 17, 2026, "Declaring the Strait of Hormuz open is easy. Restarting shipping traffic is not."). War-risk premiums come off only after weeks of incident-free transits, and the container fleet's equipment is scattered across the wrong ports. A political reopening would be an event. Normal shipping is a process that follows it by months.

Two things point the other way. Front-loaded demand is borrowed demand. Every container shipped early against a tariff deadline is one that won't ship in September, and carriers will be defending rates into that hole. The fuel market has also quietly reset the floor: with crude at prewar prices and OPEC+ raising output into a recovering supply picture (WSJ, July 6, 2026, "OPEC, Allies Hike Output Again as Hormuz Traffic Starts Recovering"), the cost base under freight rates is low. What the market is pricing now is the deal announcement. What it is not yet pricing is the attack-driven risk that August normalization slips, or the speed at which rates could unwind once capacity and demand normalize against $73 oil. The same asymmetry showed up in the El Niño positioning we tracked in June: anxiety gets priced before reality does, in both directions.