Iran Conflict Costing Shipping Industry €340 Million A Day

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Green measures would reduce the shipping industry’s exposure to fuel price shocks in future, says T&E.

• €4.6 billion in additional fuel costs since the start of the conflict

• The cost gap between fossil fuels and e-fuels has narrowed.

• Efficiency measures, like wind propulsion, slow steaming or electrification, will further protect the industry from future shocks.

Shipping companies are spending an extra €340 million a day in additional fuel costs as a result of the latest conflict in the Gulf, new T&E analysis shows. As 99% of the global fleet runs on fossil fuels, the industry is directly exposed to fuel price volatility and supply disruptions. Efficiency measures, electrification and e-fuels would reduce the industry’s exposure to price fluctuations, says T&E.

Marine fuel prices are escalating rapidly, with VLSFO reaching €941 per tonne in Singapore, up 223% since the start of 2026. At the same time, LNG prices have risen by 72% since early March. Since February 28, shipping companies have incurred more than €4.6 billion in additional fuel costs.

This makes alternative fuels increasingly more competitive. As fossil fuel prices reach record highs again, the cost gap with e-fuels is narrowing. T&E’s research shows that the cost gap between marine gas oil — one of the more expensive fossil fuels — and e-fuels has shrunk to near parity (+5%) in some ports¹. While the trend may be temporary, it shows that the volatility of fossil fuel markets offsets much of the structural cost disadvantage of clean fuels.

Eloi Nordé, shipping policy officer at T&E, said: “Chaos in the Strait of Hormuz is putting global maritime trade under the spotlight. But it’s on the oil markets where its impact will be felt the most. The war is costing the industry millions every day. Some governments and parts of the industry have spent the last year bashing green maritime measures as being too expensive, yet those costs pale in comparison to this super-disruption. If anything, this crisis should be the catalyst for more investment in European e-fuels and greater uptake of energy efficiency measures to avoid fossil fuel shocks in the future.”

Unlike fossil fuels which rely on geopolitically exposed routes, e-fuels can be produced locally. Scaling up domestic production will therefore reduce exposure to external shocks and strengthen energy security, says T&E.

“Ships that can be electrified, like short sea cargo vessels and ferries, are the low-hanging fruit that would reduce pressure on the fuel market. At the same time, efficiency measures for ocean-going vessels like slow steaming and wind-assistance can deliver huge fuel savings,” says Eloi Nordé.

T&E’s analysis shows that 20% of EU ferries could already be electrified at a lower cost than their fossil equivalents. In addition, deploying modern wind-assist technologies in the form of modern sails can cut fuel consumption for ocean-going vessels by as much as 18%.

T&E calls on European policymakers to accelerate the transition towards a more resilient and competitive maritime industry by supporting the development of a European e-fuels industry through targeted financial support for green e-fuels and strengthened targets in FuelEU Maritime.

¹ The cost gap looks at the difference between production costs for e-fuels (e-ammonia) and bunkering prices for marine gasoil (MGO) at four different ports: Rotterdam, Fujairah, Houston, Singapore.

Article from T&E.