- Shipping traffic through the Strait of Hormuz dropped by 70–90% following military conflict.
- India introduced a simplified customs procedure to help exporters manage returned shipments without extra fees.
- The United States implemented a Section 122 import surcharge while providing insurance support via the DFC.
(STRAIT OF HORMUZ) — Governments rolled out emergency trade and customs steps on Tuesday after conflict-linked disruption in the Strait of Hormuz stranded cargo at sea and forced some export consignments to turn back.
India’s Central Board of Indirect Taxes and Customs moved to let exporters bring returned shipments back under customs control through a Simplified Customs Procedure, while U.S. authorities paired a broad import surcharge with intensified enforcement under a named operation.
Shipping companies faced immediate routing and insurance decisions as war-risk underwriters tightened cover, pushing some carriers to suspend transits and others to seek alternatives that lengthen voyages.
The responses landed as energy and container flows through the Strait of Hormuz fell sharply, raising clearance, compliance and cost questions for exporters and importers with goods already moving.
The Strait of Hormuz carries approximately 20% of global oil and 20% of global LNG trade, and the disruption followed U.S.-Israeli strikes on Iranian leadership under Operation Epic Fury on Feb 28.
Shipping traffic through the strait dropped by 70–90%, a decline that traders and logistics firms linked to security fears and the pullback of commercial operators.
War-risk insurance became a central constraint, with most commercial operators including Maersk, MSC, and Hapag-Lloyd suspending transit after underwriters canceled policies or raised premiums to prohibitive levels.
Against that backdrop, India’s Central Board of Indirect Taxes and Customs issued Circular No. 09/2026-Customs to address export cargo that could not reach destination ports and returned to Indian ports.
The circular relied on Section 143AA of the Customs Act, 1962, framing the measure as a facilitation step for exporters whose vessels were forced to return without discharging cargo.
Under the procedure, vessels carrying export cargo that cannot reach destination ports can berth at their original Indian port of departure, allowing port and customs handling to restart without treating the cargo as a standard re-import process.
Customs allows containers to be offloaded at port terminals without filing a fresh Bill of Entry, as long as Customs maintains document verification and seal integrity.
Exporters can take goods back to their factories under a “Back-to-Town Facility,” but Customs must recover any disbursed export benefits before releasing the cargo.
The circular named IGST refunds and Duty Drawbacks as examples of export benefits that must be recovered manually by Customs before release, a requirement that can affect cash flow for firms that already received incentives.
The U.S. response ran on a separate track, with the Department of Homeland Security and Customs and Border Protection implementing a Section 122-based import surcharge as Operation Epic Fury began.
CBP delivered operational direction through a Cargo Systems Messaging Service notice, which trade compliance teams use to align entry filings and automated processing with new requirements.
“The surcharge applies to entries or withdrawals from warehouse for consumption from 12:01 a.m. EST on February 24, 2026. Drawback remains available for duties imposed pursuant to Section 122,” the CSMS notice said.
CBP also set out an “in transit” concept that exempted certain goods already loaded and moving before the cutover, linking the relief to entry timing that importers track at the port level.
The surcharge and the enforcement posture raised landed-cost concerns for importers, while leaving open the use of drawback as a cost-recovery mechanism for certain duty payments where eligibility applies.
In Washington, President Trump cast political risk insurance as a stabilizing signal for Gulf shipping exposure, saying the U.S. International Development Finance Corporation would support market functioning.
“DFC will offer support to commercial shipping charterers, shipowners, and key maritime insurance providers to minimise market disruptions and help ensure the free flow of goods and capital,” Trump said.
Trump sharpened his warning on Tuesday with a statement tied directly to the strait, saying, “If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far. Death, Fire, and Fury will reign upon them.”
Energy markets reacted quickly to the threat of supply disruption through the corridor, with Brent crude oil surging to over $114 per barrel on March 9 before fluctuating on March 10 after U.S. promises of naval escorts.
For exporters, the forced return of cargo created “distressed cargo” situations in which goods stuck on the water or sent back to origin needed fast customs decisions, especially when export incentives had already been paid out.
U.S. consumers also felt near-term pressure at the pump, with gas prices rising by nearly 17% in the last week and averaging $3.48 per gallon as of March 10.
Shipping lines and forwarders adjusted by rerouting vessels around the Cape of Good Hope, adding 10–14 days to transit times and lifting freight costs as schedules slipped and capacity tightened.
Businesses looking to verify the latest operational instructions can track updates through CBP’s CSMS announcements at CBP CSMS, India’s circular publication channel at CBIC customs notifications, DFC releases at DFC press releases, and White House postings at presidential actions.
