13% diesel spikes and rerouted freight signal "Seismic" shift for UK logistics

“Globalisation is dead” stated the Chancellor Rachel Reeves this week, the comments context being that the current war in the Middle East will be the final straw for global supply chains that have been continually disrupted since the financial crash in 2008, with the pandemic being the most significant until now.

The restriction on oil and gas flow through the Straight of Hormuz is creating severe turbulence in global energy markets, which has immediately impacted fuel availability, prices and transport costs across the world. Surprisingly the US has seen the highest percentage increase at 28%, with prices at $5 per gallon for the first time since 2022. Within Europe prices have risen between 20% and 27% percent and the UK has seen 13% per litre increases at the forecourt for diesel, with pump prices in the region of £1.70 to £1.80 being reported. The EU, US and UK should be protected from any diesel shortages in the medium term, as they are less dependent on Middle East crude oil, however, China and India are more exposed.

The IRU reports that disruption to fuel availability is happening in some EU member states, but it’s uncertain whether these developments reflect genuine shortages or are precautionary reactions in the market, often caused by suppliers prioritising deliveries to the home heating oil sector. With 90% of the EU truck fleet currently running on diesel the flow of goods across Europe is reliant on steady supplies.

Seismic market changes in costs and supply are clearly difficult for governments to control and manage, but for SME operators in transport it is yet another serious challenge that must be adjusted to swiftly. Dealing with a huge overnight increase in fuel costs is something that the industry has faced many times over the decades, but if, as the Chancellor says the very nature of global trade is about to reset and also the nature of freight movements around the world, Europe and the UK, we are facing unprecedented changes.

Airfreight and sea freight reactions to the conflict have been immediate, vessels rerouting around the Cape of Good Hope incur significantly higher fuel costs and 10-to-14-day additional time delays. Many Middle East services have been suspended and those vessels already at sea have been instructed to “take shelter”. Carriers are increasingly using “termination of voyage” clauses to unload containers at safe ports outside the affected region, leaving shippers to arrange their own rerouting overland or by another carrier. Container equipment and capacity imbalances for all transport modes are to be expected, with UK container hauliers expecting to see significant changes to volumes at ports over the coming months as the wider supply chain impacts arrive at our shores. 2026 is proving to be a significant year of change already.