Fuel volatility reshaping freight economics

Disruption across the Middle East has reduced fuel supply flows, driving sharp price increases and introducing a new layer of uncertainty into ocean, air and road freight operations.

While transport capacity remains available across many trade lanes, the real constraint is increasingly fuel—its cost, availability and geographic imbalance.

This is forcing carriers to adapt networks in real time, with implications for both pricing and service reliability.

Crude and refined product exports through key Middle East routes have dropped to less than 10% of pre-conflict levels, limiting replenishment into global fuel markets. In the short term, major bunkering hubs such as Singapore and key Chinese ports remain stable, supported by inventory already in the system.

However, this stability is conditional. With limited new supply entering the market, prolonged disruption is likely to tighten availability across all transport modes.

Sharp price increases drive regional imbalance

Fuel prices have risen significantly since late February. In Singapore, VLSFO prices are up approximately 70%, while marine gasoil has increased by over 150% at peak levels. In Rotterdam, VLSFO is up more than 50%, with gasoil close to double pre-disruption levels.

This divergence is widening the spread between bunkering regions, influencing where vessels refuel and how carriers structure services.

Fuel cost escalation is now feeding directly into freight pricing. Transpacific rates have increased by nearly 15% week-on-week, while Asia–North Europe and Asia–Mediterranean rates are up by 41% and 34% respectively versus pre-disruption levels.

Ocean carriers are introducing emergency fuel surcharges as traditional bunker adjustment mechanisms struggle to keep pace. Even so, analysts suggest rates would need to increase by a further 15% to fully offset current fuel costs.

Jet fuel constraints are influencing air cargo routing and capacity deployment, while rising diesel costs are pushing up road freight pricing. In the UK, diesel is particularly exposed to global supply shocks, with shortages possible if disruption persists.

Staying ahead of fuel-driven disruption

In a fuel-driven market, reactive planning is no longer sufficient. Logicall combines market intelligence with carrier and network expertise to anticipate disruption, optimise routing and secure capacity before constraints intensify.

To understand how fuel volatility could impact your supply chain—and how to mitigate it—contact Logicall for tailored routing, carrier and cost management strategies.