MID-SHIP Report: Dry Bulk Freight Market – March 18, 2026
March 18, 2026
As we enter the 4th week after the start of the War in Iran, the volatility and disruption anticipated in our last report have come to pass. Global developments are requiring a day-by-day reassessment of how ocean freight is planned and priced given the difficulty keeping pace with the changes that are creating structural concern to how freight pricing can be realistically managed for short term business execution. The obvious first point of concern/cause is bunker costs and availability.
Since the start of military action in late February, prices for delivered bunkers have more than doubled in most primary bunker supply locations. With the price of oil swinging violently between USD 90 and USD 115 in recent days, the expectation is that this price pressure will continue and get worse before things calm down. Despite US efforts to stabilize pricing/supply and calls for the provision of safe passage, the Strait of Hormuz remains effectively closed to all ships other than those few the Iranians have allowed to transit unmolested. Major suppliers of bunker fuels have warned of tightening supplies and a limitation on how far forward or how much volume they will be willing to supply in coming weeks. East Asian economies, including Japan, Korea and China, fearing supply constraints, have set limits on fuel exports which include jet fuel and bunker supplies. As more disruption is caused to oil refining in the Middle East, highlighted now by the targeting of oil production assets on both sides of the conflict, this concern will likely continue to escalate.
The US decision to temporarily suspend Jones Act requirements, for US flagged ships in coastal trade, is but one of many reactions to the concerns around reliable energy supplies. Given the limited duration of the waiver (60 days) it is unlikely this will have much of an effect on market pricing and the reaction to this may be dampened by the fact that foreign flagged oil carriers are now higher priced in the market than comparable US flagged assets (a reversal from the norm). The waiver is symbolically important though commercially limited.
The freight market reaction to these developments has been mixed. While fuel increases have caused voyage charter rates to rise dramatically, the underlying demand for dry bulk ships remains relatively weak with many trades being idled due to the conflict or, more so, to the increased costs of spot chartering. We have not seen a “pop” in market pricing (outside the conflict areas), predicted by some, as many traders look to temporize shipments in the face of growing uncertainty. However, before writing off the freight market, please recall what happened after COVID restrictions were lifted and again in 2025 once trade and shipping policy with the USA became more settled. The period of uncertainty was followed by a strong resurgence of demand and a resulting stronger freight market to clear off the backlog of cargoes to be moved.
With everything we are seeing in the space above, there are other market developments, which would have been front page news in quieter times, that are now coming in under the radar. Last week, the Chinese authorities began imposing much more intensive inspections on Panamanian flagged, likely in retaliation for Panama revoking terminal concessions held by Hutchinson Whampoa. Between March 8-12 approximately 30 Panamanian flagged ships had been detained making up about 80% of all detentions in China over the same period. If this continues, it will possibly create an added supply disruption as it will take time for these ships to be cleared of deficiencies and return to general service. Given the number of ships under sailing under the Panama flag, the implications could be a sizeable disruption to the Pacific market. Time will tell.
We repeat our hopes that this conflict may be resolved as quickly as possible. First and foremost for the innocent people unrightfully caught in the middle and, secondly, so that we can return to some form of normalcy in the way supply and pricing is managed. We think we could all enjoy a truly boring month for a change.
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