US and Israeli forces struck Iran on February 28, prompting Iran's Islamic Revolutionary Guard Corps to declare the Strait of Hormuz unsafe for commercial passage. Vessel traffic fell by roughly 70% within hours. The closure compounds pressures on fashion supply chains already strained by Red Sea disruptions, tariffs, and rising freight costs.
The Strait of Hormuz handles approximately 20 million barrels of oil daily, or 20% of the world's liquid petroleum, and serves as a key route for goods from Bangladesh, India, Pakistan, and Sri Lanka—major fashion manufacturing hubs. This marks the first simultaneous compromise of the Hormuz and Red Sea corridors, both now disrupted, with the Red Sea blocked by Houthi attacks since late 2023 forcing reroutes around the Cape of Good Hope. Over 75% of Europe's apparel imports from Asia typically pass through the Red Sea corridor, leaving countries like Türkiye, Bangladesh, and Pakistan most exposed, according to Dr. Sheng Lu of the University of Delaware. Shipment data shows brands such as JCPenney, Banana Republic, Gap, Old Navy, and Levi’s reliant on the Port of Salalah in Oman, where drone strikes hit oil storage on March 11. Old Navy accounts for over 2,300 shipments via the Pakistan-Salalah corridor. Daily vessel calls at Gulf hubs like Bandar Abbas, Jebel Ali, and Salalah have dropped more than 50% since early March. Steve Lamar, CEO of the American Apparel and Footwear Association, noted: “Apparel, footwear, and travel goods are low-margin products, meaning increases in transportation costs can significantly impact companies’ bottom lines.” Spot rates from China to Salalah rose 28%, and Asia-Europe air freight climbed $1 to $4 per kilogram. The recent US-India trade framework on February 3 and India-EU free-trade agreement on January 27 offered sourcing advantages now threatened by added 15-20 day delays. Oil prices exceeded $100 per barrel post-strikes, raising polyester and nylon costs. H&M and Adidas reported minimal Myanmar exposure amid junta fuel restrictions there.
