Negotiations continue in the war in Iran alongside ongoing military strikes, with vessels again moving toward the Persian Gulf side of the Strait of Hormuz amid expectations that the waterway may soon reopen, according to a Freightos weekly update.

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When the strait reopens, ships will rush to exit, but carriers may hesitate to return to regular Gulf port calls until they are convinced of regional stability and safe transit, fearing they could be closed in again.

The reopening could cause congestion at Far East ports when unscheduled vessels arrive. Although renewed petroleum flows through the strait will lower oil prices, a return to pre-war supply and price levels will take months, with recovery for refined products such as bunker and jet fuel expected to take even longer. Container rates on major east-west trades are climbing from elevated fuel cost baselines as peak season demand begins on both Asia-Europe and transpacific lanes. May general rate increases (GRIs) pushed Asia–North Europe rates up $300 per FEU to around $2,900 per FEU since the end of April, returning to the war-time high seen at the end of March and within $100 per FEU of the pre-Lunar New Year high. Asia–Mediterranean prices rose 20% last week to nearly $4,400 per FEU, surpassing the March high by $100 per FEU.

Red Sea diversions continue to lengthen lead times for European importers, and reports indicate contracted shippers are frontloading ahead of higher fuel costs in July when new bunker adjustment factors (BAFs) take effect, both potentially driving an early start to peak season on these routes. Carriers have announced additional GRIs and peak season surcharges (PSSs) ranging from $600 to over $1,000 per FEU, aiming to push rates higher through mid-June.

Successful mid-May GRIs saw transpacific rates increase by more than 10% on both lanes last week, signaling an early peak season start for these trades as well. Upcoming BAF updates and Amazon’s late-April announcement of moving Prime Day from July to June are possible drivers of the volume rebound. Maersk is adding an extra loader through August to accommodate expected stronger demand, with carriers announcing $2,000 per FEU PSSs for June.

For air cargo, jet fuel prices peaked in late March at more than double the pre-war rate. By mid-April, some experts warned that regions such as Europe had only a few weeks of supply left. Six weeks later, supply is lower than normal but stable, as refineries outside the Gulf increased production and demand eased due to cost-driven flight cancellations. Jet fuel prices have dropped almost 25% from the March high, and some carriers are reducing fuel surcharges.

These trends, along with continued carrier capacity recovery in and out of the Middle East, mean that air cargo rates—still well above pre-war levels—have largely passed the peaks reached from mid-April to early May. Freightos Air Index data show China–Europe prices eased 3% to less than $5.00 per kg last week, while South Asia–Europe prices rose 3% to more than $4.50 per kg but remain below the $5.15 per kg mark hit in April. Southeast Asia–Europe rates increased more than 10% to $5.20 per kg, yet are 10% lower than the early May peak on that route. China–North America rates have been climbing over the last two weeks, including a 12% increase to $6.16 per kg last week, possibly driven by the approaching Prime Day and resilient demand from AI-related hardware.

Source: IndexBox Market Intelligence Platform