Supply disruptions to outlast Mideast conflict, keeping import and energy costs elevated: Expert

• Supply chain disruptions and insurance premiums to persist into 2Q-3Q even if conflict eases
• Freight rates double and triple depending on route 
• Ship shortages and rerouting via Cape of Good Hope add up to 21 days transit delays
• Bunker fuel costs rise nearly 150%, pushing overall shipping costs higher

Shippers’ Academy Colombo Founder and CEO Rohan Masakorala

Sri Lanka is likely to face elevated import and energy costs well beyond the end of the Middle East conflict, as disruptions to global shipping, fuel infrastructure, and supply chains continue to ripple through the system, delaying any return to normal conditions despite firm fuel procurement plans.

Speaking at a CMA Sri Lanka forum on the impact of the Middle East war, Shippers’ Academy Colombo Founder and CEO Rohan Masakorala said the impact of the crisis has already moved beyond transport disruptions into storage and production, warning that recovery will take several quarters even if hostilities cease immediately.

“That will have a ripple effect even if it stops tomorrow. We are not going to get back to normal within this quarter or the end of next quarter,” he said, adding that cost escalations are likely to intensify in the second quarter.

He noted that Sri Lanka has already secured fuel and gas supplies through forward contracting, providing a degree of medium-term assurance.

“What I heard from the official analysis is that the Government has placed orders up to end of this year. So, if that order book comes along, I think we are secure until the medium to long term,” he said.

However, he cautioned that execution risks remain high due to shipping constraints.

“The availability of ships is the problem right now,” he said, noting that daily charter rates for large tankers have risen from around $ 180,000 to nearly $ 300,000 amid heightened global demand as countries rush to secure stocks.

Freight conditions have tightened across segments, with container and bulk shipping costs rising significantly. War risk surcharges and insurance premiums have also increased, adding further pressure on import costs.

Masakorala noted that over 1,000 vessels are currently constrained in the Persian Gulf region, with traffic through the Strait of Hormuz sharply reduced. “Generally, about 140 ships pass a day, but for the last two weeks, total ships that have been passed through the Strait of Hormuz is about 90,” he said.

The disruption has forced shipping lines to avoid key routes such as the Red Sea and Suez Canal, diverting traffic around the Cape of Good Hope, extending transit times by up to 21 days and tightening vessel availability.

A further escalation in costs has come from bunker fuel, which has risen by nearly 150% following the shutdown of Fujairah, previously a major global supply hub. With bunker accounting for about 40% of vessel operating costs, the impact has fed directly into freight rates.

“These are not going to settle down over a period of one month. Right now, we think it will still come in quarter two and then it can go up to quarter three if it continues as it is today,” he said.

Masakorala warned that the disruptions extend beyond maritime logistics into aviation and land transport, with broader implications for inflation, trade flows, and domestic price stability.

He added that while Sri Lanka may see short-term gains in port activity due to congestion and rerouting, longstanding structural constraints continue to limit its ability to capitalise fully on shifting global trade patterns.