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Gulf Tensions Redefining Asia–Europe Shipping

May 28, 2026 | , , , , ,

Diplomatic efforts to reopen the Strait of Hormuz remain stalled, constraining one of the world’s most important energy corridors and prolonging the biggest disruption to global oil supply in decades. 

Public statements from Tehran suggest Hormuz will only fully reopen once the conflict with the US and Israel is resolved, and even then Iran intends to retain a significant degree of control over traffic through the waterway.

Washington, for its part, is using an oil‑export blockade and secondary sanctions to squeeze Iran’s revenues and push it towards a ceasefire and broader deal. That has created a stand‑off, with Iran using threats to shipping and de facto control of Hormuz as leverage, while the US is using control of Iran’s oil exports and financial channels as its own bargaining chip. 

Pakistan has tried to mediate between Washington and Tehran, hosting talks and shuttling ideas between the two sides, but recent rounds have produced little progress. Iran wants an end to the blockade and a clear framework for Hormuz governance before tackling nuclear issues, while the US wants concrete nuclear concessions up front, with maritime and sanctions relief later. That gap, combined with sporadic flare‑ups around the Gulf, is why many analysts now see a prolonged stand‑off or even a return to open conflict as real possibilities.

Oil and fuel markets stay tight

This deadlock is feeding directly into energy markets. Roughly a fifth to a quarter of global seaborne oil normally move through Hormuz, so any sustained disruption has an outsized effect on supply and sentiment. Since the start of the war, benchmark crude prices have jumped by around 50%.

Even partial diversions and intermittent tanker flows are enough to keep physical crude markets tight and refinery margins elevated. Refineries in Europe, the US and West Africa have shifted more output into aviation and marine fuels, but feedstock uncertainty and higher risk premiums are feeding through into bunker and jet prices. For carriers, that means bunker adjustment factors, emergency fuel surcharges and war‑risk charges are now key drivers of end‑user freight rates across ocean and air.

How this feeds into peak season

Higher oil and fuel prices ripple into every mode, and the timing of bunker adjustments now interacts directly with the traditional peak‑season calendar.

Historically, Asia–Europe peak season demand has built from late June through to China’s Golden Week in early October. In the last two years, that pattern was already starting earlier as shippers brought orders forward to deal with Red Sea diversions and longer voyage times. In 2024, Asia–Europe rates began climbing in early May and peaked by mid‑July; in 2025 the climb started in early June, again topping out around mid‑July.

This year, Hormuz‑linked fuel volatility adds another layer. Bunker costs spiked after the latest escalation at the end of February, prompting emergency surcharges on spot cargo and triggering higher quarterly bunker adjustment factors for contracts from 1 July. Many large shippers are now accelerating Asia–Europe shipments through May and June to move as much volume as possible before that quarterly BAF reset takes effect.

The result is a front‑loaded peak, with exceptionally strong demand in late May and June, driven by restocking needs and attempts to get ahead of fuel‑linked rate hikes. That demand sits on top of the disruption “premium” already visible in spot rates on key east–west trades, where prices are running several hundred dollars per 40ft above where seasonal patterns would normally put them.

For UK shippers, the geopolitical headlines around Hormuz translate into three practical realities:

  • Fuel remains a structural driver of freight costs. Even if crude prices ease from day‑to‑day, bunker and jet markets are likely to stay tight and volatile as long as Hormuz is contested.
  • Timing matters more than usual. Quarterly bunker adjustment dates and carriers’ general rate increase cycles are now key milestones; moving cargo just before a BAF reset can materially change landed cost.
  • Peak season is starting earlier and lasting longer. Instead of a neat late‑Q3 surge, shippers face a longer high‑risk period running from late spring into the autumn, with rate spikes tied as much to fuel and conflict as to consumer demand.

Against that backdrop, we recommend that shippers should plan around higher and more volatile transport costs, rather than hoping for a quick return to pre‑crisis norms. Building in more lead time, watching bunker‑linked surcharges closely, and spreading volume across services and carriers can all help reduce the risk of being caught out by the next twist in Hormuz diplomacy.

EMAIL Managing Director, Andrew Smith, today to secure capacity, protect transit times and keep your supply chain moving in a rapidly changing environment.

ships at anchor

Middle East Conflict Is Rewriting the Airfreight Peak

May 28, 2026 | , , , , , ,

Airfreight has always played a dual role in supply chains, providing a reliable core mode for some flows and a pressure‑relief valve when ocean networks clog up. 

The current Middle East crisis has upended that safety‑valve function; because instead of a short, sharp bottleneck, the market has shifted into a higher‑cost, more volatile place, that is already reshaping the 2026 peak season.

The initial fear was that conflict around the Gulf would trigger a sudden collapse in air capacity and an uncontrollable spike in jet fuel costs. That fearful initial phase has now passed, but pricing has not returned to pre‑crisis norms. Freight indices show global air rates holding well above early‑2026 levels, with some Asia–Europe spot rates doubling by April and still sitting nearly 75% above pre-war levels.

Fuel surcharges are no longer climbing week by week, but they remain dramatically higher than at the start of the year. The air cargo market is not spiralling upward, but it has clearly found a new, elevated pricing floor.

Capacity returns, but on new terms

Freighter lift grew around 3% month‑on‑month in April, reversing earlier declines, although week‑on‑week growth has slowed as airlines add capacity cautiously. Gulf carriers have been rebuilding their schedules, with strong month‑on‑month growth on Asia–Middle East and Europe–Middle East lanes, and major integrators have restored intercontinental flights into Bahrain, Dubai and other Gulf hubs from Europe and Asia.

Regional airspace is open again, albeit with corridors, pre‑approvals and routing constraints. Network operators have re‑established connections that link Europe, Asia and Africa through the Middle East, and are gradually extending services deeper into the region. Backup hubs in places such as Riyadh and Muscat remain in use while the security picture stabilises, but some carriers have also found alternative “mid‑points” in India and South‑East Asia to recover Asia–Europe capacity.

Other operators remain more cautious. Some European freighter airlines are still avoiding most Middle East stops, citing airspace and security concerns, and are waiting on further guidance from aviation security authorities before fully reopening networks. Major Asian carriers have delayed the resumption of certain passenger and freighter services into Riyadh and Dubai, even as they add freighter capacity into Bangkok, Vietnam and other South‑East Asian gateways.

Recent rate data shows some easing out of major Asian hubs and on Europe–US and Europe–Gulf routes, but pricing remains historically high. Outbound Heathrow rates, for example, are still more than 40% above last year. Refineries in Europe, the US and West Africa have shifted output towards aviation fuel, airlines have rerouted networks and trimmed weaker services, and capacity is being deployed with unusual discipline. Together, these factors are preventing a rapid collapse in pricing.

What this means for the “traditional” air peak

In a normal year, shippers would expect a relatively quiet summer followed by a steady build‑up into the late‑Q3/Q4 peak. Middle East disruption has scrambled that pattern in three important ways:

  • The market has already experienced “mini peaks” in Q2, as conflict‑related diversions and fuel shocks pushed rates to levels normally associated with peak season.
  • With airspace constraints, elevated fuel costs and tight capacity discipline, the system has less slack than usual. The ability to “pivot to air” from ocean at short notice is weaker.
  • Geopolitical risk now appears to be permanently repriced into airfreight. Even if the Gulf situation stabilises, fuel surcharges and base rates are likely to remain volatile, and the industry is planning around that assumption with more frequent surcharge adjustments.

For UK shippers, the implication is that 2026’s airfreight peak is less about one clear season and more about a longer period of heightened risk, with short, unpredictable demand spikes layered onto an already expensive base. Treating the whole second half of the year as potentially “peak‑like”, budgeting for higher air costs, and pre‑booking critical flows on key lanes will be essential to avoid being caught out.

Metro works closely with airlines and partners to secure capacity, identify alternative routings and maintain reliability in a disrupted market. If your supply chain depends on airfreight, EMAIL our Managing Director, Andrew Smith, to protect space, manage cost exposure and keep your cargo moving.

refinery

Fuel shocks across ocean, air and road freight

Apr 29, 2026 | , , , , , , , , , , , , , , , , , , , ,

With the Strait of Hormuz effectively closed, crude oil can still exist within the region, but refined products, which includes marine fuel, jet fuel and diesel, can no longer move freely to key consumption markets, which has triggered a sharp divergence in pricing and availability across all modes. 

For shippers, this creates a higher cost floor, as transport fuels are no longer moving in line with crude. Marine bunker, jet fuel and diesel each have their own supply chains and crack spreads (the margin between crude and refined products), and are now behaving independently of Brent. This is driving bunker-led cost pressure in ocean, jet fuel-driven inflation in air, and diesel-driven cost escalation in road. 

Ocean freight: bunker costs reset the pricing floor

In ocean freight, bunker fuel has become the dominant cost driver. Asian fuel hubs, particularly Singapore, are experiencing significant pressure as rerouted vessels increase demand while supply remains constrained.

This has created a disconnect between traditional pricing mechanisms and real-time costs. 

Emergency bunker surcharges are being applied across major trade lanes, while standard adjustment factors lag behind market conditions and may only catch up with current fuel inflation later in the year.

The result is a structurally higher cost base, with ocean rates now reflecting fuel volatility rather than underlying demand alone. 

Air freight: jet fuel shortage tightens capacity

Air freight is facing the most acute fuel-driven pressure. Gulf refineries, which typically supply jet fuel to Europe and Asia, are unable to export at normal levels, creating a shortage of refined product.

This has driven a sharp increase in jet fuel prices, with crack spreads widening dramatically from around $16 per barrel pre-crisis to approximately $100 in some regions. 

This regional price divergence means that Asia and Middle East jet fuel benchmarks sit substantially above North American levels, meaning that every kilo of freight uplifted is starting from a materially higher fuel cost base. 

As a result, airlines are adjusting networks, reducing marginal capacity and prioritising fuel efficiency, tightening available uplift and sustaining elevated airfreight rates.

Road freight: diesel inflation feeds through to transport costs

Road freight is also seeing significant cost pressure, with diesel prices rising independently of crude due to refinery constraints and regional supply dynamics.

Fuel accounts for roughly 30% of total truck operating costs, meaning sustained diesel inflation is already feeding through into pricing. 

At the same time, increased reliance on overland routes across the Middle East is adding further demand pressure, compounding both cost and capacity challenges.

What this means for shippers

  • Expect fuel-driven cost volatility across all modes
  • Plan for longer and less predictable transit times
  • Build flexibility into routing and inventory strategies
  • Monitor surcharge mechanisms

Fuel disruption, routing constraints and capacity pressure are now closely linked. Managing one without the others is no longer effective.

Metro works with customers to model alternative routes, balance mode selection and manage cost exposure in real time. If you are seeing rising costs, delays or uncertainty in your supply chain, EMAIL managing director, Andrew Smith, to secure the most effective solution for your cargo.

Hong Kong X ray costs and delay fears

Airfreight rates remain elevated with disruption likely to delay recovery

Apr 29, 2026 | , , , , , , , , , , ,

Airfreight markets have undergone a prolonged period of elevated pricing since the start of Middle East hostilities and despite softer demand in recent weeks spot rates have continued to rise sharply. 

Global spot rate indices are up by more than 35% year on year and have increased by over 40% since the onset of the Middle East crisis, highlighting the extent to which supply-side disruption, rather than demand, has been driving the market.

This reflects a structural shift, where fuel availability, routing complexity and network disruption are now setting the baseline for pricing.

Fuel supply constraints begin to tighten capacity further

The next phase of disruption is already emerging. The UK has taken delivery of the final shipments of jet fuel that transited the Strait of Hormuz before the conflict escalated, meaning supply constraints are now expected to intensify.

Jet fuel availability is becoming a defining factor in airline operations, with rising costs and limited supply forcing carriers to reassess schedules. Flight cancellations have already begun, and reinstating these services is not straightforward. Aircraft, crew availability, regulatory approvals and network coordination all create barriers to a rapid return of capacity.

As a result, even where demand softens, supply is tightening again, reinforcing upward pressure on rates.

Capacity recovery remains uneven and fragile

While global capacity has recovered from the initial shock, when supply fell by around 20% at the start of the crisis, it remains below previous levels and unevenly distributed.

Capacity from Middle East and South Asia origins is still significantly constrained, with reductions of around 20% year on year, limiting the availability of key transit routes. At the same time, global demand has softened, falling by approximately 8% year on year, but this has not yet translated into lower pricing.

This imbalance highlights a key market dynamic: capacity is returning, but not necessarily where it is needed, and operational constraints continue to limit how effectively it can be deployed.

Trade lane volatility reflects shifting network priorities

Rate movements are now highly variable by trade lane, reflecting how airlines are repositioning capacity.

From some origins, rates have increased by more than 50% year on year, while others have seen more moderate gains or even short-term declines. European outbound routes remain mixed, with strength on certain long-haul lanes offset by weaker demand elsewhere.

At the same time, airlines are redeploying aircraft to higher-yield routes rather than simply rebuilding pre-conflict networks, creating further imbalance across global capacity.

Recovery will take time, even under stable conditions

Even if conditions stabilise, a rapid return to normal is unlikely.

Airlines will be cautious about reinstating routes through the Middle East, given the fragility of the ceasefire and ongoing geopolitical risk. Airspace restrictions, insurance considerations and operational planning will all slow the recovery process.

Passenger networks, vital for critical belly-hold capacity, may also take time to rebuild, as demand for travel into the region recovers gradually. This will further constrain available cargo capacity.

Even with weaker volumes in some regions, rates are holding firm or increasing, and any downward correction is likely to be gradual rather than immediate.

Secure capacity in a constrained market

With fuel supply tightening, capacity uneven and recovery uncertain, airfreight is entering a period where access and planning matter more than ever.

Metro works closely with airlines and partners to secure capacity, identify alternative routings and maintain reliability in a disrupted market. If your supply chain depends on airfreight, EMAIL our Managing Director, Andrew Smith, to protect space, manage cost exposure and keep your cargo moving.

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