Disrupted shipping in the Middle East has led to extended payment terms for some foreign trade companies, with multiple banks cautiously managing the associated business risks.

How does the Middle East situation transmit to financial institution risk control?

Financial Associated Press, March 24 (Reporter Liang Kezhi) The situation in the Middle East remains tense, and the impact is being transmitted to financial institutions through shipping chains.

Several frontline professionals from banks, shipping, and logistics industries stated in interviews that oil transport prices on Middle East routes have fluctuated significantly in the short term, with some shipping routes obstructed, leading to longer payment cycles for companies. The impact has begun to extend from price levels to areas such as ship financing, accounts receivable, and cross-border payments, with financial institutions closely monitoring the market and situation that continue to evolve.

An executive vice president of a certain joint-stock bank’s Shanghai branch told the Financial Associated Press that they are currently focusing on ship mortgage financing involving Middle East business, paying attention to the safety of mortgage assets on one hand and cautiously approving new business or raising risk thresholds on the other.

A corporate business professional from a large bank in Guangzhou mentioned that recently, some goods exported to the UAE and Saudi Arabia have been delayed in arriving at port due to route blockages. “If the goods do not arrive at the port, the other party cannot confirm receipt, and payment will naturally be delayed,” predicting that accounts receivable periods will lengthen.

Shipping companies feel the impact more directly. A manager from a freight forwarding company in Shenzhen revealed that currently on Middle East routes, “price is not the biggest issue; the key is that many shipping companies are unwilling to take orders,” adding that “risks are uncontrollable, and detour costs are also rising.” This individual also mentioned that the situation in the Middle East has caused “oil shortages” in some Southeast Asian countries, with shipping rates on certain routes increasing by 15% to 20% that week.

“Valuable but no ships” transportation is hindered, accounts receivable pressure emerges

According to the latest data from Zhongyin Securities, on March 20, 2026, the TCE (Time Charter Equivalent) of VLCC (Very Large Crude Carrier) standard speed and economic speed on the Middle East-China route were $346,998/day and $337,836/day, respectively, increasing by 44.85% and 44.28% month-on-month, and significantly increasing by 945.99% and 917.49% year-on-year.

Behind the ninefold price increase is the “valuable but no ships” situation and route obstructions, which have begun to transmit chain reactions to some foreign trade companies’ cash flow.

A corporate business professional from a large bank in Guangzhou stated that recently, some goods exported to the UAE and Saudi Arabia have been delayed in arriving at port due to route blockages. “If the goods do not arrive at the port, the other party cannot confirm receipt, and payment will naturally be delayed,” predicting that accounts receivable periods will lengthen.

This individual admitted that currently, the number of affected companies is “not very many,” but they are focusing on such clients, “watching changes in the company’s payment period, cash turnover ability, and whether there are liquidity risks and opportunities for financial support.”

Another business leader from a foreign bank’s Shanghai branch also mentioned that the current impact is still in the early stages, but they have observed some clients’ cross-border settlement periods lengthening. However, “if the situation continues, it cannot be ruled out that more obvious risks may spill over,” and they are maintaining close communication with the head office for information.

Ship financing tightens, and if the war continues, interest rates may adjust

Compared to the relatively unified responses of shipping and trade companies, financial institutions are taking varying approaches.

The aforementioned interviewed bank representatives stated that they have begun to reassess ship financing business involving Middle East routes. A vice president of a joint-stock bank’s Shanghai branch pointed out that the current focus is mainly on two aspects: one is the safety of the mortgage ships’ assets, and the other is the risk admission standards for new business, “with some project approvals becoming significantly stricter.”

Regarding financing costs, a market manager from a shipping company in Hong Kong stated that the ship financing interest rates reported by banks recently have “seen a slight increase compared to last year, but remain within an acceptable range,” with no obvious policy tightening observed. However, if the situation remains tense, financing interest rates and risk requirements may further increase.

A representative from a financing leasing association in South China mentioned that the disturbances on Middle East routes are gradually accumulating, “in the short term, the income from operating leases is more directly affected, especially from vacancies and delays due to unstable voyages; financial leasing, due to longer terms, is relatively limited in short-term impacts.”

This individual believes that in the coming period, the risk pricing of ship leasing, insurance, and related fixed asset financing “may be reassessed,” especially for projects with significant exposure on Middle East routes.

(Reporter Liang Kezhi, Financial Associated Press)