The cost of oil has now climbed to over $100 per barrel for the first time since 2022, with the price rising 10% yesterday (12 March 2026) alone.
Consequently, the cost of transporting waste by truck within the UK has already begun to increase, while shipping costs have so far remained relatively stable.
Up until now, shipping lines have remained measured in their approaches, despite Iran promising yesterday to continue to block the Strait of Hormuz and reports of cargo ships and oil tankers being attacked in The Gulf.
This is largely due to the fact that most of these companies currently circumnavigate Middle Eastern shipping routes by utilising the Cape of Good Hope.
However, companies such as MSC and Maersk have both warned that they will introduce “war surcharges” in the coming weeks due to increased bunker costs.
It is predicted that these surcharges will sit around $200 to $250 per container and will lead to markets being subdued for at least a month – and possibly longer depending on the next stages of the war.
Overall, most in the sector seem to be taking a step back and avoiding taking on additional volumes in order to mitigate risk amidst an unstable and unpredictable time geopolitically.
Paul Sanderson, Chief Executive of The Recycling Association, said: “There is a lot of uncertainty in the market at how the higher costs of energy and transport will play out. This could suppress the value of some materials, but some may see some short-term opportunity from those trying to get ahead of the market.
“For some grades, this uncertainty has made people take a step back until they have a better sense of what is happening.
“Much will depend on how long the war lasts and whether fuel and energy prices fall, stabilise or potentially go higher and how that affects the global economy and the costs of recycling.”
Paper sector may not see spring uplift
Alongside increased shipping costs and general market volatility, the paper sector has been warned that increased energy costs may see European mills take extended downtime over spring and summer.
Traditionally, European mills come online in the spring months which increases demand for European paper and sees prices start to peak.
If these mills do pursue downtime, it is likely that prices may remain subdued.
Metals end market continues to be squeezed
The instability in the export market has also caused some metals recyclers to reportedly be adopting a more cautious approach to buying scrap.
With fewer outlets for materials and uncertainty over onward movement, there is growing expectations that prices for metals could come under further downward pressure in the short term.
This exacerbates the tricky conditions that the metals recycling sector have been facing recently, particularly following the partial collapse of UK steelmaking which has made recyclers more reliant on exporting.
Recycled plastics may see a benefit
Although it is too early to speculate, the soaring cost of crude oil will likely drive the price of virgin plastic upward and may in turn see demand for recycled plastic increase.
At the same time, the cost of energy and reprocessing is likely to go up which may mean that the overall benefits of increased demand are not fully felt by the sector.
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