The U.S.-Iran war is squeezing one of the most important corridors in the world for oil, spurring higher fuel costs and hiking the financial burden for carriers and shippers alike.
Trucking companies exposed to the spot market can be vulnerable to financial challenges from rising diesel prices, compared to firms with fuel surcharges that insulate risks, according to Jason Miller, the Eli Broad endowed professor of supply chain management at Michigan State University.
“For contract freight, shippers will absorb most of these higher diesel costs through higher freight rates,” Miller said in a LinkedIn post. “For freight priced on an all-in basis (e.g., most spot truckload rates), carriers end up absorbing much of the higher diesel prices by making less profit.”
Small spot market carriers should be fine, though, as highway retail diesel backs off from recent highs, DAT iQ Principal Analyst Dean Croke told Trucking Dive in an email. The EIA diesel weekly average has “finally caught up to where today’s pump prices are, which means the fuel surcharge will start to reflect the retail surge we’ve seen.”
Beyond trucking, shippers are also facing higher costs to transport freight across other modes. Ocean carriers such as Hapag-Lloyd and CMA CGM as well as parcel delivery companies UPS and FedEx have all deployed higher fuel surcharges in recent weeks.
Despite the recent surge, the EIA’s most recent outlook forecast, published March 10, nearly two weeks after a U.S. and Israel attack on Iran that provoked the war, expects diesel prices to average $4.12 per gallon for 2026 and $3.78 for 2027.
But the agency said the closure of the Strait of Hormuz, a key waterway bordering Iran, would further squeeze oil production in the region “in the coming weeks.”
Source: https://www.supplychaindive.com/news/diesel-prices-higher-iran-war-above-5-dollars/815615/