Iran War and Shipping Markets: Why Strong Freight Is Delaying Ship Recycling

In this episode of GMS Podcasts, Jamie Dalzell, Head of GMS Singapore, speaks with Nayeem Noor, VP of Business Development at GMS, about how the ongoing Iran war is influencing shipping and ship recycling markets.

With disruption around the Strait of Hormuz, the expectation across the industry was that recycling supply would increase. Historically, geopolitical shocks tend to push older or less efficient vessels toward demolition. That pattern is not playing out this time.

Instead, freight markets have remained firm. Routes have lengthened, risk premiums have increased, and older vessels continue to find employment. Even with higher operational and geopolitical risk, many ships are still commercially viable, which is delaying recycling decisions.

The discussion focuses on this shift in market behaviour. Rather than exiting the market, owners are continuing to trade as long as earnings justify it. As a result, recycling yards are not seeing the expected flow of tonnage.

The episode also looks at the current position across major recycling destinations. India offers compliance strength through Alang, Bangladesh has demand but remains short of supply, Pakistan has regional advantages but faces execution challenges, and Turkey continues to operate in a more limited, specialised segment.

A key takeaway is that supply has not disappeared. It has been deferred. The ships are still in the system, but they are not being released for recycling.

Looking ahead, the conversation considers what could change this dynamic. If freight softens or costs rise, recycling supply could return quickly. At the same time, damaged or disrupted vessels linked to the Iran conflict may eventually enter the recycling stream, bringing a different set of operational and compliance considerations.

This episode will be useful for shipowners, recyclers, cash buyers and industry participants following freight markets and the impact of the Iran war on global shipping.

Topics discussed in this episode

• How the Iran war is affecting global shipping patterns
• Why disruption is not translating into recycling supply
• The role of freight markets in extending vessel life
• Owner decision making during periods of uncertainty
• The concept of delayed supply in ship recycling
• Regional dynamics across India, Bangladesh, Pakistan and Turkey
• Pricing challenges and hesitation in the recycling market
• Handling considerations for damaged or disrupted vessels
• What could trigger the return of recycling supply