Rising tensions between the United States and Iran risk slowing the fragile return of container shipping traffic through the Red Sea, with Xeneta Chief Analyst Peter Sand warning that geopolitical uncertainty could delay carriers’ plans to resume Suez routings and reshape capacity deployment deeper into 2026.

Sand said the latest market data shows a weakening rate environment across major east–west trades, with spot rates falling even as carriers gradually restore services through the Red Sea.

But he cautioned that any escalation in U.S.–Iran friction—particularly if it emboldens Houthi militia activity—could interrupt that recovery.

"Average spot rates are down this week across all main fronthaul trades out of the Far East," Sand said. "From Far East to U.S. West Coast and US East Coast, it is a textbook market development with falling spot rates coinciding with a slight uptick in offered capacity."

He noted that the Far East–North Europe trade is showing even greater weakness. "It is a different story from Far East to North Europe where offered capacity has decreased week-on-week but spot rates continue to fall. This suggests an even weaker market on this trade."

Sand said the broader outlook for 2026 remains defined by overcapacity, a structural challenge that is being temporarily softened by the slow and uneven return of carriers to the Red Sea.

"2026 is expected to be a year defined by overcapacity in container shipping, compounded by a largescale return of services to the Red Sea. Rising tensions between U.S. and Iran could influence this situation, especially if it threatens Houthi militia resuming attacks on merchant ships in the Red Sea," he said.

Even without a direct military confrontation, Sand warned that political signaling alone could alter carrier behavior.

"Even if there is not a full escalation in conflict between U.S. and Iran, the military posturing and rhetoric from political leaders can influence the security situation in the region and see carriers slow down plans to resume Red Sea transits," Sand said.

"If so, this would delay a largescale return of container shipping to the Red Sea and ease the overcapacity headache for carriers deeper into 2026."

The Red Sea corridor has been recovering unevenly after months of vessel attacks, diversions, and seasonal demand softness. But analysts say the rebound remains vulnerable to geopolitical shocks—particularly as Washington and Tehran exchange sharper rhetoric and military posturing in the Gulf region.

A renewed deterioration in regional security could push carriers to delay full reinstatement of Red Sea services, prolonging longer transit times and sustaining elevated operating costs.

Sand said that geopolitical risk remains a defining variable for container markets in early 2026.