The outbreak of the conflict in Iran on 28 February 2026 has radically changed the outlook for the road freight market. The closure of the Strait of Hormuz, imposed by Iran’s Revolutionary Guards in response to US and Israeli strikes on Iran, triggered a surge in fuel prices that immediately impacted operating costs. The average diesel price per litre reached €1.96 by the end of the first quarter of 2026, up 26% compared with the end of Q4 2025.
The effects on road freight rates remain relatively moderate in Q1 2026. Rising fuel costs only affected the month of March and were passed on to only part of the market. However, the first signs are already visible, and this crisis is set to have a profound impact on the sector in the coming months. “The Q1 picture reveals a market entering a new phase where cost pressures are overtaking demand as the primary driver behind rate movements. The resulting contract-spot divergence reflects two pricing logics responding to the same shock at different speeds,” said Thomas Larrieu, Chief Executive Officer of Upply.
The Upply x Ti x IRU report on European road freight rates in Q1 2026 indeed shows an increase in contract market prices. The index stood at 140.1 points, up 3.2 points compared with Q4 2025 and 8.9 points year-on-year.
By contrast, the European road freight spot rate index fell to 132.3 points, down 2.8 points compared with Q4 2025 and 2.0 points year-on-year. This was mainly due to a decline in road freight volumes between the EU’s main economies in Q1 compared with Q4 2025. This is a fairly typical seasonal trend following the year-end holiday peak, but the weak economic environment has amplified the slowdown. Retail trade volumes and industrial production remained stable, while extra-EU trade fell by 10% and construction sector output declined by 3%.
Base 100: January 2017 - Data source: Upply
The road freight sector is entering the second quarter under particularly difficult conditions. “Fuel price volatility, compounded by the war in Iran and geopolitical disruptions, has laid bare our industry's fragile operating conditions. European governments have rightly set emergency measures. But uncoordinated action can distort markets, leaving operators exposed where national room for manoeuvre is limited,” said Vincent Erard, IRU Director of Strategy and Development. In addition, road hauliers continue to face rising toll costs and recruitment pressures. This cost inflation is weighing on both investment and capacity.
Furthermore, the conflict in the Middle East is undermining an already fragile economic recovery. Rising energy prices are fuelling inflation once again, which is expected to increase from 2.1% in 2025 to 2.6% in 2026, according to estimates published by the European Central Bank in March 2026. This situation is weighing on household purchasing power as well as consumer and business confidence. As a result, the war in the Middle East is also leading to a downward revision of growth prospects. “Quarterly growth is seen to drop from 0.3% in the first quarter, which is expected to remain relatively unaffected by the war, to stand at 0.1% in the second quarter and 0.2% in the third quarter”, the ECB stated in its March 2026 macroeconomic projections.
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