Gwadar's Hormuz windfall: real traffic, small scale, unsettled politics

For a decade Gwadar has been the clearest example of a Belt and Road port built ahead of demand. This year that has begun to change, for a reason no planner intended. The war involving Iran has made the Strait of Hormuz dangerous, and Gwadar, roughly 400 km away on Pakistan's Balochistan coast, has started to receive cargo diverted from the Gulf. In the past fortnight the port has drawn a burst of commentary, much of it predicting that China is preparing to retreat. Both readings, revival and retreat, need checking against the figures.

What the war has brought

The traffic gains are real. According to Gwadar Port Authority data cited by Geo, the port handled a record 11,000 containers in April. In the whole of 2025 it processed about 8,300 containers and fewer than 20 vessels called. In May the Chinese vessel MV B Jia Shan berthed with about 20,669 tonnes of steel billets for onward shipment to Sohar in Oman. Its 12.8-metre draught showed that the port can take larger ships. Another vessel, MV Show Long, brought 16,077 tonnes of transhipment cargo originally bound for Kuwait. Sources differ on the scale of these operations. Geo gives 53,277 tonnes as the port's total cargo for May, while The Diplomat describes a single 53,277-tonne billet shipment diverted from Sohar.

Islamabad is trying to make the gains last. The government offers a 23-year tax holiday and duty-free equipment imports to investors, a 25% cut in berthing fees for container ships and discounts of up to 40% on transhipment charges, Geo reports. Pakistan and Oman are discussing a sister-port agreement between Gwadar and Sohar. Gwadar Port Authority chairman Noor-ul-Haq Baloch told The Diplomat that it would cover training, joint discounts for shipping lines and priority berthing, and that it 'is not just tied to the current disruptions'. Russia's deputy prime minister, Alexei Overchuk, said in May that Moscow and Islamabad were discussing linking Gwadar to the International North–South Transport Corridor.

Scale should temper the enthusiasm. A month of 11,000 containers is a large gain for Gwadar but small for regional shipping, and the port's own incentives are what one would expect from a terminal still trying to attract regular services. The Diplomat's 15 September analysis makes the point directly: Pakistani officials talk about Gwadar as an alternative route in a crisis but say little about what would make it competitive once the crisis passes. Diversions caused by a war end when the war ends, unless shipping lines have by then signed up for regular calls.

The retreat argument

The more dramatic claim is that Beijing is losing interest. Jaideep Saikia of the New Delhi-based Council for Strategic and Defence Research, writing for the Lowy Institute on 25 September, called Gwadar 'a monument to strategic overreach'. He argued that the Karakoram route, at altitudes above 4,600 metres, cannot carry high-volume container traffic and that Balochistan's insurgency makes any pipeline or railway a target. He also noted that, under the 40-year lease, 91% of port revenues are supposed to go to China, so a port that earns little gives Beijing little. He predicted a 'quiet retreat'.

Parts of this diagnosis are well founded. The overland corridor to Xinjiang has never been a commercial substitute for sea freight, and attacks on Chinese personnel have forced Pakistan to raise dedicated Special Security Divisions, as Saikia notes. The forecast of withdrawal, however, rests on inference rather than on any statement or decision from Beijing. China Overseas Port Holding Company still operates the port, Saikia cites no announced decision to scale back, and the Chinese ambassador's statements on 30 September pointed the other way. The record so far is consistent with a China that has stopped expanding at Gwadar, not one that is leaving.

Where Beijing and Islamabad are actually looking

The official message points elsewhere. At a reception on 30 September for the 77th anniversary of the People's Republic, Prime Minister Shehbaz Sharif said CPEC was moving to a second phase focused on industrialisation, special economic zones, information technology and artificial intelligence, agriculture, and mines and minerals. Ambassador Jiang Zaidong said China–Pakistan trade had reached $16.44bn in January–July, up 13.4% year on year, and that China remained Pakistan's largest source of foreign investment. Pakistan Today reports that China accounts for 60.7% of it. Chinese imports from Pakistan rose 45.7%, according to the ambassador's figures, and agricultural trade reached about $830m in January–August, up 45%.

Some of that growth is not going through Gwadar. In September a shipment of Pakistani dried chillies reached Chengdu by sea and rail through Qinzhou in Guangxi, on the New International Land–Sea Trade Corridor. Mujtaba Arshad of the Pakistan Institute of Development Economics, writing in Asia Times, cites the Chengdu port authority's estimate that the route cuts delivery times by seven to ten days and costs by about 1,000 yuan a tonne. He warns against treating it as a rival to Gwadar, but the example shows where the two governments now see CPEC's value: in linking Pakistani producers to Chinese buyers, by whatever route works.

The constraint on the ground

Gwadar's local politics have not improved with its traffic. The Baloch Yakjehti Committee alleged on 29 September that about 3,000 residents of Sardasht, near Shadi Cor in Gwadar district, are being forced from their homes on security grounds. It also pointed to checkpoints, fencing proposals and restrictions on fishermen. ANI's report carried no response from the authorities. The Lowy commentary and The Diplomat both describe insurgent attacks and local exclusion as persistent drags on investment. A port whose hinterland is being cleared for security reasons will struggle to become the commercial hub Pakistan is advertising.

Washington's interest adds another layer. The Diplomat notes that Pakistan offered the United States development of Pasni, about 100 km from Gwadar, in September 2025, and that a US Naval War College report has named Gwadar as a possible site for expanded Chinese naval activity. Whether Washington has taken up the Pasni offer has not been made public.

The test

The useful question is not whether China stays at Gwadar but whether the port keeps any of this year's traffic once Hormuz reopens. Three indicators will answer it: whether the Gwadar–Sohar agreement is signed and brings a scheduled service; whether container volumes in the fourth quarter stay well above 2025's monthly average of under 700; and whether the authorities can secure the port without displacing the community around it. Without the first two, Gwadar will return to being a strategic asset with little commercial use. Without the third, the 23-year tax holidays are unlikely to draw investors.

Sources

• Geo News — Hormuz bottleneck: Could Middle East crisis change Gwadar's fortunes?
• The Diplomat — Pakistan-Oman maritime deal signals Gwadar's expanding regional relevance
• The Diplomat — Why is the US eyeing Gwadar port?
• Lowy Institute, The Interpreter — China's Gwadar gamble isn't paying off
• Asia Times — Pakistan's new Chengdu trade route shows CPEC can work
• News18 (ANI) — Baloch Yakjehti Committee alleges forced evictions in Gwadar's Sardasht
• Pakistan Today — Pakistan, China resolve to deepen 'iron-clad' friendship, advance CPEC 2.0
• The Daily CPEC — Pakistan-China trade hits $16.44bn, envoy confirms