Maersk CEO Vincent Clerc stated on May 7 that since the outbreak of the US-Iran conflict, the group's monthly fuel bill has doubled to $500 million. These costs have been "fully" recovered from customers through surcharges and adjusted bunker pricing formulas.

However, during Maersk's first-quarter earnings conference call, Clerc told analysts that the company's ability to sustain this cost pass-through capability will depend on the long-term impact of high energy prices on consumer demand and how the container shipping industry addresses the increasingly acute issue of excess capacity.

"We are concerned that a soft demand environment and poor capacity management across the industry will erode our ability to recover costs in the short-term market. Depending on the degree of erosion, the second half of the year could quickly turn into a rather pessimistic situation," he said.

Limited Financial Impact of Conflict on Q1

On Thursday, Maersk released its financial results for the first quarter of 2026. Although the group's ocean, logistics, and terminals divisions all achieved considerable volume growth, key financial metrics were weak due to oversupply in the market suppressing freight rates: revenue was $12.97 billion, a 2.64% year-on-year decrease; EBITDA was $1.753 billion, down 35.31% year-on-year; and EBIT was $340 million, plummeting 72.86% year-on-year.

Nevertheless, Maersk handled a cargo volume of 3.2 million TEUs in the quarter, a 9% year-on-year increase. The average unit rate was $2,081/TEU, down 14% year-on-year but showing a sequential increase compared to the fourth quarter of 2025.

So far, Maersk has been able to cope with the cost impact of the energy shock. However, Clerc noted that the magnitude, speed, and market impact of this bunker fuel price surge are unprecedented.

He added, "Due to accounting delays in recognizing revenue and costs, the financial impact of the conflict in Q1 was limited. The rising costs to be recorded in the income statement for Q2 and beyond are currently being recovered through higher spot rates and successful commercial levers with contract customers, particularly surcharges and bunker pricing formulas."

He continued, "This translates to approximately $500 million in additional costs per month. Even in the current context of overall market oversupply and severe disruption in the energy market, we are able to fully recover these costs."

Bunker fuel prices in Q1 actually fell by 16% year-on-year. Although oil prices surged after the US-Iran conflict broke out in March, it was not enough to offset the much lower price levels in January and February. Operating costs increased slightly by 0.6% in Q1, but this was offset by strong volume growth, resulting in a 7.1% decrease in unit costs.

Oversupply Casts a Pall Over the Industry

According to Sea-web, a division of S&P Global, global new ship orders continue to climb. Currently, the total capacity of ships under construction reaches 12 million TEUs, accounting for 36% of the existing operating fleet. Vincent Clerc believes that high energy costs will soon trigger a wave of slow steaming, which could absorb up to 1.5 million TEUs of capacity.

"We are also looking into this option ourselves; from a cost-benefit perspective, it is very attractive. But if we don't initiate ship recycling and truly retire some of the older vessels that haven't been scrapped in the past seven years, the market will be extremely volatile," he said.

Currently, sailing speeds on global deep-sea routes are between 16 and 17 knots. Vincent Clerc stated that at current fuel prices, reducing speeds to 14.5–15 knots would be "quite economically viable."

He added, "From a fuel cost perspective, another very favorable factor is the reopening of the Red Sea route. When sailing from India to the Mediterranean, routing via the Red Sea consumes significantly less fuel than detouring around the southern tip of Africa."