In the first week of March 2026, Brent crude oil surpassed $100 per barrel for the first time since 2022. The trigger: the US-Israel military conflict with Iran led to the closure of the Strait of Hormuz, a chokepoint that handles roughly 20% of the world’s crude trade. Saudi Arabia, Kuwait, the UAE, and Iraq cut production, and oil prices surged with the largest single-day spike in recent memory.
For companies that move goods across North America, this isn’t just a financial headline. It’s a direct hit to freight rates, diesel costs, and supply chain budgets. If you ship between the US and Mexico — or anywhere along the cross-border shipping corridor — the impact is already showing up in carrier quotes. In this article, we break down what’s happening with oil prices, how it affects trucking, and what you can do right now to protect your operations.
What’s Happening with Oil Prices in 2026?
The Strait of Hormuz crisis and production cuts
The conflict in the Middle East escalated in late February 2026 when the United States and Israel launched military operations against Iran. Within days, the Strait of Hormuz — the world’s most important maritime corridor for oil and liquefied natural gas — was effectively shut down to tanker traffic.
The response from major producers was immediate. Kuwait declared force majeure on its crude shipments and began cutting output. Iraq’s production from its main southern fields dropped roughly 70%, from 4.3 million to 1.3 million barrels per day. The UAE scaled back offshore production, and Saudi Arabia joined the cuts days later. Attacks on infrastructure near refineries in the region added further pressure on global supply, and the trucking industry felt the ripple effects almost immediately as fuel prices at the pump began climbing.
The result: Brent hit an intraday high of $119.50, the largest absolute move in a single day in recent memory. West Texas Intermediate (WTI), the US benchmark, topped $115.
Where are oil prices headed?
Uncertainty remains high. Goldman Sachs warned that oil could stay above $100 if the supply disruption continues. Qatar’s Energy Minister went further, stating oil prices could reach $150 within two to three weeks if tankers remain unable to transit Hormuz.
G7 economies are considering a coordinated release of strategic petroleum reserves, and the US temporarily eased sanctions on Russia to allow India to purchase Russian crude for 30 days. But as long as the conflict persists, volatility will continue to ripple through the trucking sector and every part of the economy that depends on moving goods by road. Higher diesel at the pump means higher cost per mile for every carrier on the highway, and that translates to increased rates for everyone who ships freight.
How Rising Fuel Costs Hit Trucking
From crude oil to the diesel pump to your freight rate
The relationship between oil and trucking costs is direct. When the price of crude rises, diesel at the pump follows — and in the United States, that adjustment happens fast. Unlike Mexico, where a government tax mechanism buffers fuel price swings, US diesel responds almost in real time to international crude movements. Fuel can account for 30% to 40% of total road freight operating costs, making it the single largest variable expense for carriers.
Carriers protect their margins by applying a fuel surcharge — a percentage added on top of the base rate, indexed to the current cost of diesel. This is standard practice across the North American freight shipping sector. When diesel spikes, the surcharge goes up automatically. When it drops, so does the surcharge. It’s the mechanism that keeps carriers and trucking companies operating without having to renegotiate every contract each time fuel costs shift.
Fixed vs. variable cost in trucking
A trucking company’s cost structure has two components: fixed costs (insurance, driver wages, vehicle depreciation, permits) and variable costs (diesel, tires, maintenance, tolls). Diesel is the single largest variable cost — and the one most sensitive to oil swings. When fuel prices rise sharply, carriers face smaller profit margins unless they can pass the increase through freight pricing adjustments or surcharges.
On long-haul routes like Laredo to Dallas, El Paso to Chicago, or Nogales to Phoenix, fuel can represent over 40% of the total trip cost. That’s a significant number when you consider the miles involved. For shorter runs, the percentage is lower, but the cumulative impact across hundreds of loads per month is equally significant for carriers and the companies they serve. Many providers are now quoting rates that reflect these operational costs more aggressively than at any point in the last three years.
Impact by service type
Not every trucking service feels the oil price impact the same way. Full truckload (FTL) shipments absorb the increase proportionally to distance, with a single shipper bearing the cost. Refrigerated transport gets hit twice: diesel for the tractor plus fuel for the reefer unit, which runs continuously throughout the trip. And for flatbed or lowboy configurations, the lower fuel efficiency of these vehicles amplifies the effect of every dollar increase in diesel. Across the board, trucking is adjusting to a new cost reality that shows no signs of easing in the near term.
Are rising fuel costs affecting your freight budget?
Loyalty Logistics works with a network of carriers across the US, Mexico, and Canada to find competitive rates — even in volatile conditions.
Explore our cross-border services →The Cross-Border Factor: Shipping Between the US, Mexico, and Canada
Triple exposure to fuel costs
When you move goods across borders in North America, your exposure to fuel costs multiplies. A cross-border shipment from Monterrey to Dallas means paying Mexican diesel rates on one side and US rates on the other. Ship all the way to Toronto, and you add a third pricing layer that includes Canada’s carbon tax.
In the US, diesel responds almost immediately to international crude fluctuations. In Mexico, the government’s IEPS tax mechanism absorbs some volatility but prevents fuel prices from dropping when oil retreats. In Canada, the carbon tax adds a structural cost on top of pricing. The result: a single cross-border shipment can cross three completely different fuel cost environments in one trip — and carriers price their services accordingly.
Currency exchange as a multiplier
There’s a factor many shippers overlook: currency exchange. If oil rises while the Mexican peso weakens against the dollar — a likely scenario during global uncertainty — the cost impact is amplified. Mexican carriers fueling up on the US side of the border pay in dollars, and that cost flows directly into the rates they quote.
USD-denominated cross-border rates also adjust faster than domestic rates in Mexico, creating a gap that can complicate freight budgeting for companies with operations on both sides of the border. Understanding tariffs on Canada and Mexico is equally critical when planning cross-border costs.
Cascade: maritime disruption → port congestion → drayage
The Strait of Hormuz closure doesn’t just drive up oil. It directly disrupts international maritime shipping routes. Vessels that normally transit the Persian Gulf are rerouting through longer, costlier paths, causing transit delays and pushing ocean rates higher across the industry.
Locally, this congestion creates pressure on US and Mexican ports, driving up demand for drayage services. When ports back up, wait times for container pickup increase, and drayage costs rise from both higher demand and more expensive diesel for the trucks that service port operations. Shippers who depend on these services should be talking to their providers now about securing capacity before things tighten further.
Industries feeling the oil price impact
Industries that depend on cross-border transportation are feeling the impact unevenly. Food and beverage companies, which require continuous refrigeration, face the steepest increases due to their double dependency on diesel. Automotive manufacturers with just-in-time supply chains absorb the extra costs to maintain production continuity. And retail and e-commerce businesses, operating on thin margins, are forced to pass any increase through to the end consumer. Across every sector, trucking is the transmission belt that converts higher fuel costs into higher costs for goods on the shelf.
Shipping between the US and Mexico?
Get a quote from Loyalty Logistics and discover competitive options for your cross-border shipments, even in a rising cost environment.
Get a Quote →5 Strategies to Reduce Freight Costs During the Oil Crisis
Understanding the problem is only half the equation. What matters is what you can do today to protect your supply chain from a volatile fuel market. Here are five strategies you can implement immediately.
1. Negotiate transparent fuel surcharge clauses
A surcharge indexed to actual diesel costs protects both the carrier and the shipper. When fuel rises, the surcharge adjusts automatically; when it drops, so does your cost. This eliminates constant renegotiations and gives both parties predictability. If your current contracts don’t include this clause, now is the time to add one — it’s standard across the trucking industry for a reason.
2. Lock in long-term rates
Spot rates are the first to reflect fuel increases. If you have consistent volume, negotiating a quarterly or semi-annual contract with fixed rates (or a surcharge ceiling) gives you an advantage over those quoting shipment by shipment. Carriers value volume commitments, and that leverage can translate into better pricing even when diesel is climbing.
3. Prepare for port congestion — secure drayage capacity
With international shipping lanes disrupted by the Middle East conflict, port congestion in the US and Mexico is only a matter of time. If your operation depends on container drayage, book capacity with your provider now — before demand overwhelms availability and costs spike further across the industry.
4. Evaluate intermodal options for long-haul routes
On longer corridors, combining truck with rail (intermodal) can cut fuel costs by 15% to 30% compared to a pure FTL point-to-point service. A broker with visibility across multiple transportation modes can identify these opportunities and help you design a more efficient routing strategy that reduces your cost per mile. Choosing the right partners — like selecting the best refrigerated trucking companies — is critical when optimizing for both cost and service quality.
5. Work with a partner that covers North America
A provider with presence in the US, Mexico, and Canada can arbitrage between market conditions across all three countries. This includes access to carriers with better fuel pricing, optimized routes that minimize mileage on the most expensive legs, and the ability to react quickly when the market shifts. In an environment where diesel costs differ significantly by country, that regional visibility makes the difference between absorbing the hit and passing it to your customers. For shippers moving loads across borders, this kind of coverage is no longer optional — it’s essential.
Need to Protect Your Freight Costs?
When oil tops $100 and diesel costs are climbing, having a partner with deep North American coverage matters. Loyalty Logistics operates domestic and cross-border routes across the United States, Mexico, and Canada, with services including full truckload (FTL), refrigerated transport, flatbed, and container drayage. Our carriers serve the most demanding routes in the trucking industry, and our team monitors oil and fuel conditions to offer the best options — even when prices are surging.
Whether you need to move perishable goods to Texas, auto parts to Ontario, or industrial materials to Monterrey, we’re ready to help you navigate this cost environment. For companies shipping to or from Mexico, understanding the current tariff and fuel market landscape is critical to protecting your margins in 2026.
Related Articles
- Cross Border Shipping: Complete Guide [2026]
- Understanding Tariffs on Canada and Mexico
- Best Refrigerated Trucking Companies: How to Choose [2026]
Loyalty Logistics: Connecting businesses with opportunities across North America.
Written by: Carlos Robayo, Director of Marketing at Loyalty Logistics
With experience in transportation strategy and international trade, Carlos specializes in connecting businesses with efficient and reliable shipping solutions across North America.
