Expeditors (EXPD) Status update summary

Energy market disruptions and outlook

• Ongoing Iran conflict has caused major disruptions in energy supply, leading to spikes in crude and transportation fuel prices, with normalization expected to take several months even in a best-case scenario.

• Physical oil markets are under significant stress, with a large spread between Dated Brent and futures indicating difficulty in obtaining spot barrels.

• Restoration of trade flows through the Strait of Hormuz and oil production is expected to take 2-5 months, while natural gas normalization may take 1-2 years.

• Freight rates in affected lanes have spiked 100%-200% and are expected to remain 10%-20% above pre-crisis levels even after normalization.

• Fuel surcharges have increased sharply, with a lagged return to normal as prices fall, typically taking several weeks to months.

Policy and structural shifts

• The crisis has shifted market perception of Middle East risks from conditional to structural, with futures markets pricing in a long-term risk premium for oil and jet fuel.

• Governments are prioritizing energy security, with the U.S. focusing on fossil fuel dominance and infrastructure, Europe accelerating domestic energy transition, and China reinforcing supply chain dominance in renewables.

• The energy trilemma—balancing security, environment, and affordability—remains central, but security is now the dominant concern.

Supply chain and transportation impacts

• Clients are experiencing 30%-100% increases in air fuel surcharges and up to 100% increases in diesel-related costs, with ocean carriers implementing emergency bunker surcharges.

• Modeling and digital twins are used to assess immediate and projected impacts, providing scenario-based cost forecasts and identifying mitigation strategies such as consolidation and mode optimization.

• Secondary impacts include capacity shortages, especially in air freight due to fuel shortages and cancellations, with localized disruptions in regions like Southeast Asia and Vietnam.