The situation in the Middle East is "blazing" the Suez Canal! The export of forest products to Asia is blocked, and who will pay for the soaring costs?

The situation in the Middle East has led to the blockade of the Strait of Hormuz and disruptions in shipping through the Suez Canal, seriously affecting the export of forest products from Europe to Asia. Delays in delivery and rising costs are inevitable, especially for the trade of pulp, wood and other products. 

01

The situation in the Middle East and disrupted shipping

On the fifth day of the US-Iran conflict, according to Iran's Fars News Agency, the Strait of Hormuz is now completely under the control of the Iranian Navy, and more than ten oil tankers have been hit by artillery fire in the strait.

Mohammad Akbarzadeh, deputy commander of the Islamic Revolutionary Guard Corps Navy, emphasized that after Iran announced the closure of the Strait of Hormuz to navigation, oil tankers, merchant ships and fishing boats could no longer pass through the strait.

As there are no signs of easing in the situation, many large shipping companies have had to suspend or reduce their shipping operations through the Suez Canal, forcing ships traveling from Europe to Asia to take a detour around the Cape of Good Hope in Africa. 

02

Impact on European Wood Product Exports

Delivery and Costs

Maarit Lindström, the director and chief economist of the Finnish Forest Industries Federation (Metsäteollisuus ry), stated that this structural adjustment is expected to lead to a delay in delivery cycles of several weeks.

If the geopolitical conflict continues to escalate, the increase in freight costs and the intensification of competition for container space will be inevitable. 

Asian market dependence

The Asian market absorbs about 20% of Finland's forest industry exports, with the vast majority of the cargo transported via the Suez Canal. Among the European exports of forest products to Asia, pulp accounts for 50%, wood products for 26%, cardboard for 15%, and paper for 8%. 

03

Specific impact on the Chinese market

In 2025, Europe's exports of wood (logs and sawn timber) to China reached as high as 18.567 million cubic meters, accounting for nearly 33.5% of China's total wood imports, with a corresponding value of over 4 billion US dollars.

Iran's blockade of the Strait of Hormuz does not directly cut off the trade route of forest products between China and Europe, but the passage crisis in the Red Sea - Suez Canal triggered by it will have a substantial impact on this key trade channel and inevitably affect the trade of forest products between China and Europe. 

04

Other Impacts and Risk Assessment

Industry insiders say that given the short period of the current situation's development, it is still impossible to fully assess the scale of the risks. However, the duration of the transportation disruption will be the key. Short-term disruptions may be dealt with by rerouting and temporarily increasing costs, but if the situation remains tense, for Chinese importers, this means that products such as pulp, paperboard, and wood from Europe will face higher procurement costs, longer delivery cycles, and the risk of supply chain disruptions. In addition, according to feedback from exporters, although the Middle East market accounts for a relatively lower proportion compared to Asia, once the shipping routes are blocked, even if the volume of goods is limited, it is difficult to avoid the impact of logistics disruptions. 

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