News / Evergreen braces customers for Hormuz-induced price spike

Evergreen management said at a shareholders’ meeting yesterday that the Taiwanese mainline operator expected fuel costs to be higher in Q2 as oil prices see-saw amid the continued closure of the Strait of Hormuz.

GM Wu Kuang Hui said Evergreen had signed term supply contracts with bunker suppliers in major ports to manage costs, as it anticipated the Middle East conflict would persist into Q4.

Mr Wu said: “This ensures stable bunker supply and reduces price volatility. Suppliers will also flexibly adjust replenishment strategies according to market conditions.

“Most of the fuel Evergreen used in Q1 was purchased at lower prices, and the average fuel cost remained relatively stable, at approximately $422 per tonne, lower than the $454 projected for Q4.”

With the continued escalation of tensions in the Middle East, recent oil prices are about 50% higher than in Q1. Brent crude prices are around $95.88 per barrel today, up from the Q1 average of $79.67.

Mr Wu said annual contracts for transpacific and Asia-Europe shipments had been concluded at almost the same levels as 2025, except that fuel surcharges had been included to reflect the higher costs.

Despite market players’ declaration of an early peak season, Mr Wu was more restrained, saying: “The Red Sea route is unlikely to return to normal in the short term. With no significant increase in market supply, the supply-demand structure is expected to remain relatively balanced. However, it remains to be seen whether this year’s peak season will start or end earlier than planned.”

Alphaliner projects market capacity to grow 3.9% and cargo volume 2.5% this year, representing the smallest supply-demand gap in recent years.

Evergreen’s consolidated revenue for Q1 26 was $2.7bn, down 21% from the same period last year, as average freight rates dropped proportionately, to $959 per teu, despite overall cargo volume being up 2%, to 2.64m teu. Pre-tax profit fell 67% from Q1 25, to $333m.