The current escalation involving Iran has placed Israel’s transport and logistics sectors under one of the most significant stress tests in recent decades. Despite ongoing disruptions, cargo continues to move, ports remain operational and the insurance market adjusts in real time.
For the international marine insurance community, Israel offers a practical example of how trade, logistics and insurance systems function under sustained geopolitical pressure.
During Operation “Roaring Lion”, the aviation sector faced the most severe disruption. Official data from the Israel Airports Authority shows that aircraft movements at Ben Gurion Airport fell from 10,267 in March 2025 to 2,720 in March 2026, a drop of approximately 73.5%, even though the escalation only affected part of the month. Passenger traffic declined by more than 85%, and domestic commercial aviation activity was largely suspended.
The impact on cargo capacity was especially evident in passenger aircraft belly cargo, which fell by over 87%, from 8,498 tonnes to 1,091 tonnes. Dedicated freighter activity declined to a far lesser extent, and the market increasingly relied on freighter aircraft and charters. As a result, cargo movement shifted from continuous flow to prioritised and consolidated shipments. Volumes decreased, but significantly less than passenger traffic, reflecting efforts to maintain essential supply chains.
These changes altered the risk profile. Cargo became more concentrated, transit times lengthened, and additional handling stages increased exposure to damage, delay and accumulation, particularly at constrained air cargo terminals.
By contrast, Israel’s seaports continued to operate throughout, maintaining their role as the country’s primary trade channel. At the same time, the maritime environment became more complex. Freight rates increased and remained elevated, supported by higher fuel costs, with bunker prices still about 60% above pre-war levels.
Disruptions in Gulf shipping affected normal routing patterns. Some vessels reduced or avoided calls at Persian Gulf ports, with cargo redirected to alternative hubs such as Jeddah, Salalah, Sohar and Khor Fakkan. From there, goods required additional handling and onward transport, often involving longer routes and higher costs. This also contributed to congestion at ports and inland terminals. In some cases, cargo was moved overland via Saudi Arabia and Jordan.
For insurers, these developments required adjustment. Routing became less predictable, transit periods extended and shipments often involved multiple stages. Risk became harder to track, while the concentration of higher values in fewer movements increased exposure.
The Israeli Property Tax and Compensation Fund continues to play an important stabilising role by covering war-related cargo damage. It allows trade to continue where commercial war risk cover becomes limited or expensive. At the same time, demand from non-Israeli clients for locally arranged insurance solutions has increased.
Israel’s experience over recent years, including frequent WSRCC-related events, together with mitigation systems such as the Iron Dome, has created a market accustomed to operating under ongoing threat conditions. In practice, this enables a relatively quick return to regular commercial activity following escalations.
The current situation follows a familiar pattern: disruption is immediate but adjustment is equally rapid. For the global insurance market, Israel highlights not only the resilience of trade but the extent to which risk conditions can change in a short period of time.
