John Sackton is the founder of SeafoodNews.com
The disastrous US and Israeli attack on Iran has led to the completely predictable closure of the Strait of Hormuz, which accounts for around 20% of global oil consumption. The International Energy Agency (IEA) called it the largest supply disruption in the history of the world oil market.
Diesel prices at fishing ports worldwide rose 40 to 70 percent in a matter of weeks. In Rhode Island, dockside diesel hit $5.75 a gallon, up nearly 50 percent since February. What had been a $4,000 fuel bill for a trip became $6,000 to $8,000, according to one boat captain. In Thailand, diesel peaked at roughly $1.40 per liter before government intervention, up 69 percent since February.
The upcoming Canadian lobster fishery will be hit hard. Martin Mallet, executive director of the Maritime Fishermen’s Union, says diesel prices are up to around $6.25 to $6.50 USD per gallon, from $3.80 to $4.00 a year ago. He says harvesters are targeting a shore price of $9 to $10 CAD.
“Fishermen in our neck of the woods here in the Gulf and on the eastern shore of Nova Scotia, back in 2019, 2018, they were being paid about $6 or $7 a pound. Now the cost of operation for all of these fishermen has almost doubled over that period,” he told CBC.
But this is the tip of the iceberg. The seafood industry relies on oil at every step, from the ocean or aquaculture pond to the consumer. The lobster harvester is paying more for fuel. The trucking cost to the plant has increased. The air freight cost has increased. And the restaurant to which this lobster is being flown, whether in San Francisco, Tokyo, or Shanghai, is seeing customer erosion as higher prices hit consumers. None of them can easily pass the full increase forward. The result is margin compression at every point.
The vessel story and how it affects wild harvest are not where the highest hidden costs accumulate. Aeration systems account for 90 to 95 percent of the total energy consumed on a shrimp farm. The paddlewheels and pumps that keep oxygen in ponds run around the clock. A shrimp farmer cannot idle his operation the way a trawler captain can tie up at the dock. Shrimp in water must be fed and aerated, or they die. The cost of running those systems just rose 40 to 70 percent.
The Strait of Hormuz is also the export route for roughly 30 to 35 percent of the global trade in urea, the most widely used fertilizer in shrimp pond management. Since the closure, FOB granular urea prices rose from $400 to $490 per metric ton before the war to around $700 per metric ton by late March. India, which imports roughly 18 percent of its urea from Gulf producers, is absorbing this input cost increase on top of the fuel increase, on top of higher freight costs to export finished product. The Indian shrimp farmer is not facing a price spike. He is facing higher costs on diesel, fertilizer, feed, and outbound freight at the same time, with no ability to pause mid-crop.
Vietnam’s logistics companies moved to 24-hour price quotes in March because no one would hold a freight rate for longer than a day. Delivery times on seafood exports have been extended by 10 to 15 days. For exporters already operating with thin margins in a tariff-disrupted US market, this is not a manageable headwind. About half of Thailand’s vessels at Samut Sakhon are docked and not making trips. Thailand tried to hold prices down through a fuel subsidy fund that was losing $32 million a day, but abandoned the cap on March 25. Since then there has been some price easing but diesel is still up 25% to 47%.
Feed producers rely on gas and heavy fuel oil to dry fishmeal. In Chile, prices doubled for LNG this March. Feed accounts for 50 to 70 percent of a Chilean salmon farmer’s production costs. Feed production is a steam-intensive thermal process, and the three companies that supply virtually all of Chile’s salmon feed, BioMar, Skretting, and Cargill/EWOS, operate plants that run on fuel oil, but in some cases are beginning to transition to gas. The war has increased the cost of both the fossil fuels they currently use and the fishmeal and fish oil ingredients that go into the feed itself.
Chile was supposed to be salmon’s growth story in 2026. Analysts called it the only major producing region with meaningful supply expansion planned. Now that expansion is threatened as costs spiral upward.
These impacts are global. On the West Coast, California’s salmon recovery is now more difficult economically. The Pacific Fishery Management Council set a commercial quota of 83,000 Chinook starting May 16, with the first opening for troll chinook in three years. Fishermen up and down the coast have been waiting for this season. Diesel is currently averaging $7.68 a gallon in California. A typical salmon troller gets about 1.5 miles per gallon.
In Alaska, the salmon forecast is already down 36 percent for 2026: 125.5 million fish projected against last year’s 194.8 million. That biological shortfall now intersects with a fuel cost increase that is 40 to 50 percent above pre-war levels. Alaska Marine Lines raised its fuel surcharge from 11 to 18.5 percent. Matson raised its surcharge from 20.5 to 26.5 percent. TOTE Maritime raised its surcharge to 29.5 percent. Everything that moves to fishing communities in Southeast Alaska, Kodiak, Dutch Harbor, and Bristol Bay, which means nets, fuel barrels, ice, cans, and crew provisions, moves through these companies. This does not even account for the increased diesel prices for salmon gillnetters and tenders.
The trap for Alaska and California salmon is the same. Both fisheries need strong prices to make seasons economically viable in a high-cost environment. But the ability of US consumers to pay premium prices for wild salmon is declining at the same time fuel prices are rising. Consumers paying $4 or more per gallon at the pump have less money for the fish counter. We just don’t know if consumers will support the higher prices needed to cover operating costs, and whether the price increases due to lower supply will be sufficient to clear the market. If not, it will be the fishing value chain that suffers the losses, with margins squeezed at every level.
Where does this leave our industry?
Seafood is the most internationally traded of all animal protein products. That global reach is its structural advantage in normal times. In times of geopolitical disruption, that same reach becomes a liability.
The industry entered 2026 already weakened. US seafood importers paid more than $2.2 billion in tariffs between April 2025 and January 2026. Trade flows were disrupted. Margins were compressed. Investment was deferred. The body was already dealing with a serious illness.
Then Trump launched a war on Iran, and the global oil market broke. The IEA called it the largest supply disruption in the history of the world oil market. The stock market is trading up on every hint of a ceasefire because tech and banking have been on a run, and absent a full global depression, they will come through with profits intact. That is not our situation.
In seafood, costs are going up while consumer purchasing power is going down. The margin squeeze is running simultaneously across fishing, farming, processing, distribution, foodservice and retail. It will not appear fully in the industry data until next year. But the outcome is already implied by what’s in front of us. Next year, this industry will be smaller. More participants, from boat owners to processors to distributors, will have sold out to larger competitors where possible and simply closed where it was not. The ongoing consolidation will accelerate. Some fishing communities that depend on a single plant or major operator might be hurt.
This is not a price spike that corrects itself when the war ends. The Port of Los Angeles has said that for every day of disruption, ports need three days to recover. The IEA’s strategic reserves have been tapped. The current ceasefire has not reopened the strait to normal traffic. The cost increases are already in the system. Even under optimistic assumptions, fuel and freight costs will remain elevated through the 2026 fishing season and well into 2027.
The seafood industry did not start this war, had no voice in the decision to launch it, and has no ability to exit the cost structure it created. That is the disastrous and predictable legacy of this US military miscalculation in the Middle East, undertaken without counting the full cost to the people who will pay it.
