More Than Just Fuel Prices: Middle East Conflict Also Disrupting Global Shipping Norms

Fuel costs have surged sharply since the outbreak of conflict in the Middle East, quickly becoming one of the most significant challenges facing the logistics industry. Rising prices and operating costs are creating serious financial pressure on both shippers and carriers.

The conflict is also driving a broader and arguably more damaging ripple effect. Higher fuel prices are pushing up fertilizer costs, which in turn are raising food prices. This escalation comes at a time when U.S. consumers are already cutting back on discretionary spending due to higher health care premiums and the resumption of student loan payments.

As a result, households are being forced to prepare to spend even more on essential items such as food and fuel, further straining consumer spending and economic demand.

“Fuel is by far the industry’s single largest cost, and the dramatic rise in prices has placed significant strain on both shippers and carriers,” said Anthony Fullbrook, President of OEC Group’s North American Region. “These increases are impacting shipping norms, as importers are forced to choose between absorbing higher fuel prices in the near term or delaying cargo movements in the hope that the conflict comes to a conclusion and prices return to normal.”

Unfortunately, that has not been the case. As the conflict continues, backlogs at ports of origin are expected to grow, while vessel rotations become increasingly disrupted. Industry experts already estimate that even if the conflict were to end today, it would take at least five months for global supply chain patterns to return to normal.

Fuel prices, however, may remain elevated for much longer, particularly until a lasting solution is found to ensure uninterrupted access through the Strait of Hormuz.

“The conflict in the Middle East could not have come at a worse time for the industry, as we continue to grapple with capacity constraints while also seeking clarity around the future direction of tariffs,” said Frank Costa, Vice President of Sales at OEC Group. “This will ultimately impact space availability, as there will inevitably be increased demand to move essential goods quickly. When that happens, rates could rise rapidly, creating yet another challenge for shippers.”