Ongoing military tensions in the Middle East—particularly involving Iran, Israel, and the United States—are raising new concerns across global supply chains, including the coffee industry. On 21 June, U.S. military action targeted Iran’s nuclear facilities, followed by a retaliatory missile attack by Iran on the U.S. Al Udeid Air Base in Qatar just days later.
Although neither Iran nor Israel are major coffee producers, the region plays a critical role in global logistics. Maritime shipping, the primary mode of transporting green coffee beans worldwide, has already been impacted by instability in the area.
Shipping analyst Dominic Enthoven, Principal Advisor at MPC International, notes that disruptions to traditional routes, particularly the Suez Canal, are reshaping coffee logistics. “After attacks by Houthi forces on vessels transiting the Red Sea began in late 2023, many shipping companies rerouted their fleets around the Cape of Good Hope,” he says. “This added approximately ten days to shipping timelines and increased freight costs significantly.”
This diversion has particularly affected coffee exports from East African countries like Ethiopia, Kenya, Rwanda, and Uganda—regions that rely heavily on Suez-linked routes to access European and North American markets. The disruption has also rippled out to affect exports from major Asian producers such as Vietnam and Indonesia, with port congestion, container shortages, and tighter shipping schedules becoming widespread.
Earlier this year, some carriers—including CMA CGM—had cautiously resumed partial use of the Suez Canal, buoyed by statements from Houthi groups indicating they would not target vessels unaffiliated with Israeli ports. However, the latest escalation in hostilities has cast doubt on these fragile improvements.
“With the conflict now intensifying, the likelihood of a broader return to the Suez Canal appears slim,” says Enthoven. “Heightened risk is driving up insurance premiums, making the route economically unviable for many shippers.”
There is also the looming threat of a possible Iranian embargo on the Strait of Hormuz, a strategic chokepoint through which nearly 30% of the world’s crude oil passes. Any disruption here could sharply raise fuel prices, further impacting freight rates.
“If the Strait were blocked, oil prices would spike,” Enthoven explains. “This would trigger higher Bunker Adjustment Factors (BAFs), leading to increased shipping costs for all importers, including those in the coffee sector.”
While the International Chamber of Shipping estimates that maritime transport accounts for only about four cents of the cost of a US$3.40 cup of coffee, larger-scale importers and roasters could face significant financial strain under prolonged shipping volatility.
At the time of publishing, unconfirmed reports suggested discussions toward a ceasefire between Iran and Israel may be underway. However, given the rapidly changing nature of the situation, the global coffee industry—and indeed the broader trade community—will need to monitor developments closely.
Source: Adapted from an original report by Kathryn Lewis, published June 24, 2025.