Iran threatened to attack any ship crossing the Strait of Hormuz, as the third day of U.S. and Israeli strikes brought further retaliation, driving vessel traffic down and fuel prices up, and prompting several insurers to cancel some war-risk cover.

• Ocean carriers also cast a wary eye on the Red Sea and Suez Canal and the possibility of renewed attacks on shipping by Yemen’s Iran-backed Houthi militants. The CEO of Hapag-Lloyd, Rolf Habben Jansen, said the conflict would significantly delay container shipping’s return to Suez, the WSJ Logistics Report’s Paul Berger writes. The warning comes just as container carriers had restarted transits after steering clear of the critical waterway for over two years.

As of Monday afternoon, Iranian aerial strikes had hit at least five oil tankers, killing one sailor, the WSJ’s Costas Paris reports. One of them, a U.S.-flagged fuel-products tanker called the Stena Imperative, was struck by explosive projectiles while docked at the port of Bahrain. Ship traffic through the Strait of Hormuz was down more than 80% since U.S. and Israeli airstrikes began on Saturday, according to Lloyd’s List Intelligence data.

• European natural-gas prices soared nearly 40% on the near-halt to tanker traffic and threat to crucial Qatari supplies.
• In the U.S. truckers might be in for the biggest fuel-price shock, with the diesel futures price rising 12%, while gasoline futures rose 3.7%.
• Global fertilizer prices were also poised to surge even further, as the region is a major center of production and shipping.

The threats of attack drove several insurers to cancel specialized policies that cover vessels in high-risk waters, the Journal’s Joe Wallace writes. Typical policies mostly exclude damage incurred in war zones, so owners top up with additional conflict cover.

• Norwegian insurance association Skuld told customers on Sunday that it was cancelling war-risk cover for customers sailing in Iranian waters or the Persian Gulf from March 5, because reinsurers that backstop the policies are pulling back.
• Other insurers sending similar notices to clients include Steamship Mutual and NorthStandard in the U.K.

Meanwhile, wide stretches of airspace across the busy global flight corridor have been shut for days. At least 11,000 flights have been canceled, and critical airport hubs in the region have been targeted by Iranian missile and drone strikes.

• The Iran conflict and its effect on oil prices could push up inflation and jeopardize growth in global container shipping demand this year, former Treasury Secretary Janet Yellen said. (Journal of Commerce)
• About 100 of the 750 vessels backed up around the Strait of Hormuz are containerships, representing about 10% of the global box-carrying fleet, Ocean Network Express’s CEO said. (Reuters)

U.S. factory activity expanded in February for the second straight month as new orders and production continued to grow, a survey of manufacturing firms said. The Institute for Supply Management said its purchasing managers’ index of manufacturing activity was 52.4 last month, compared with 52.6 in January.

The index for new orders expanded for the second straight month after four straight readings in contraction, but was down slightly from January’s figure. Of the six biggest manufacturing sectors, chemical products, machinery, transportation equipment and computer and electronic products expanded. Canadian manufacturers’ activity picked up for a second straight month in February, as well.

Factory activity in some of Asia’s top exporting economies also grew last month, on strong demand buoyed by the AI boom and rebounding confidence. Taiwan’s manufacturing output expanded at its steepest rate in over four-and-a-half years in February, S&P Global index data showed, while Japan’s purchasing managers’ index rose to hit a 45-month high.

New order growth in India quickened despite a slower rise in exports, and Southeast Asia markets including the Philippines, Indonesia and Thailand joined the upturn, too.

• Canada and India signed agreements to strengthen ties in critical minerals, energy and trade, aiming to reduce Canada’s reliance on the U.S. (WSJ)
• A federal appeals court denied the Trump administration’s request to delay the fight over tariff refunds, taking steps to reopen legal proceedings and send the case back to the U.S. Court of International Trade. (Bloomberg)

• China’s National People’s Congress is set to start this week, with representatives expected to approve a five-year economic blueprint to make the nation a technological superpower rival to the U.S. (WSJ)
• Elliott Investment Management agreed to a sweetened bid for Toyota Industries that values the forklift maker at almost $40 billion, paving the way for it to be taken private. (WSJ)
• Amazon said it would invest $39.82 billion through 2035 to bolster its cloud and data-center infrastructure in Spain. (WSJ)
• A group of investors including BlackRock’s Global Infrastructure Partners and EQT agreed to acquire AES for $10.7 billion as the AI data-center buildout fuels demand for power generation. (WSJ)
• Nvidia is investing $2 billion in Lumentum and Coherent to accelerate advanced optics technologies for AI infrastructure. (WSJ)
• Equinor and its partners made a commercial oil discovery in the North Sea, estimated to hold 25 million to 89 million barrels of oil equivalent. (WSJ)
• Ships are getting stuck in ice and requiring extra help from icebreakers in the Baltic Sea as the harshest winter in 15 years bears down. (The Maritime Executive)
• The Department of Labor plans to rescind a Biden-era rule classifying independent contractors, in a move watched closely by truckers. (Transport Topics)

Mark R. Long is editor of WSJ Logistics Report. Reach him at mark.long@wsj.com. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long, Liz Young and Paul Berger.