Evergreen Marine Corporation’s management said at a shareholders’ meeting yesterday that the Taiwanese mainline operator expects fuel costs to be higher in Q2 than in Q1, as oil prices see-saw amid the continued closure of the Strait of Hormuz.
GM Wu Kuang Hui said that Evergreen has signed term supply contracts with bunker suppliers in major ports to manage costs, as it anticipates the Middle East conflict to 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 that 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 average of $79.67 in Q1.
Mr Wu said that annual contracts for transpacific and Asia-Europe shipments have been concluded at almost the same levels in 2025, except that fuel surcharges have 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 by 3.9% and cargo volume by 2.5% in 2026, representing the smallest supply-demand gap in recent years.
Evergreen’s consolidated revenue for Q1 26 was $2.7bn (TW$86.56bn), down 21% from the same period last year, as average freight rates dropped proportionately, to $959 per TEU, despite overall cargo volume being up by 2% to 2.64m teu. Pre-tax profit fell by 67% from Q1 25, to $333m.