Global shipping markets are entering another period of elevated costs as geopolitical conflicts, fuel pressures and trade bottlenecks reshape the movement of goods around the world.

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The disruptions linked to the U.S.-Iran conflict, the war in Ukraine and constraints affecting the Panama Canal are creating sharply different conditions across the maritime sector. Tanker owners are benefiting from exceptionally strong freight markets, while container carriers continue adding surcharges to offset rising operating and fuel costs.

“Disruption is no longer the exception,” said Richard Meade, editor-in-chief of Lloyd’s List. He said shipping markets are increasingly being driven by geopolitical developments, security concerns and uncertainty rather than traditional economic factors alone.

Tanker earnings reach extraordinary levels

The strength of the tanker market illustrates the scale of the current disruption.

Very Large Crude Carriers, or VLCCs, operating from Saudi Arabia and the Arabian Gulf to China were earning about $1.10 million per day on September 15, according to the figures cited by Lloyd’s List.

Meade said earnings approaching $1 million a day would have been difficult to imagine in the recent past. Tight vessel availability, disrupted trade patterns and longer voyages have rapidly changed the economics of tanker shipping.

During a Lloyd’s List webinar, senior reporter Greg Miller said the current tanker cycle has surpassed the shipping boom of the 2000s. He compared the scale of tanker profitability with the extraordinary earnings recorded by container lines during the COVID-19 period.

The result is a market in which geopolitical disruption is directly translating into higher freight earnings.

Higher transport costs spread through supply chains

The consequences extend well beyond shipping companies.

Refinery constraints, disruptions associated with the U.S.-Iran conflict and the continuing impact of the Russia-Ukraine war are putting additional pressure on crude and refined-product markets.

Higher diesel prices are also increasing transportation expenses for businesses that depend on road, rail and ocean freight.

For companies handling chemicals and other petroleum-based materials, the uncertainty is particularly difficult to manage. Businesses are increasingly placing smaller orders and seeking shorter lead times because they do not want to commit large amounts of capital to expensive inventory that could lose value if prices fall.

At the same time, maintaining insufficient inventory creates another risk: companies may be unable to meet customer demand when supplies are needed.

The pressure could eventually reach consumers through higher prices for transportation, food and other products. Petroleum-based chemicals are also used in thousands of products, including paints, clothing and materials used in data-center cooling systems.

Container carriers add another layer of costs

While tanker owners are benefiting from stronger earnings, container shipping companies are responding to the changing environment through additional charges.

An analysis from Xeneta shows several waves of surcharges introduced by ocean carriers during the year. Emergency fuel surcharges were followed by additional inland and intermodal charges, as well as peak-season fees.

Another emergency fuel surcharge was introduced as tensions surrounding the U.S.-Iran conflict intensified in late July.

“Three surcharge waves in six months: volatility is now being invoiced,” wrote Emily Stausboll, senior analyst at Xeneta.

For shippers, the effect is straightforward: transportation budgets are becoming harder to predict.

Uncertainty becomes part of the freight bill

The latest market conditions highlight how quickly geopolitical and environmental disruptions can move from shipping lanes into supply-chain costs.

Longer routes, restricted capacity, higher fuel expenses and changing trade patterns can all increase the cost of moving cargo. Carriers and tanker owners are therefore operating in an environment where disruption itself has become a major market driver.

For shippers, there is little indication that cost pressures will disappear quickly. More surcharges, higher freight expenses and continued volatility could remain part of global trade as companies adjust to a less predictable shipping environment.

For investors in tanker owners and container carriers, the current earnings environment presents an opportunity to strengthen balance sheets and invest in operations while freight markets remain unusually strong.