Tensions between Iran and the US continue to climb around the Strait of Hormuz, with Iran now announcing plans to impose a wider exclusion zone on areas near the strait. Fuel rates have trended up since the ceasefire collapse in July, but recent escalations as well as an increase in Chinese crude imports have pushed bunker fuel prices back up to levels last seen in June. Jet fuel prices are back to May levels with both fuels about 60% higher than before the start of the war. Climbing fuel costs are likely setting an elevated floor for container rates, but ocean prices are still largely being driven by demand trends and disruptions to capacity availability. Transpacific ocean rates cooled slightly last week, suggesting there won’t be additional rate increases in what is likely the last few weeks of peak season. But elevated demand that started in late May has kept prices at peak levels since early July. Current rates – of about $7,600/FEU to the West Coast and $9,500/FEU to the East Coast – are about back to levels last seen during peak season in 2024 when seasonal demand, Red Sea disruptions to capacity and some frontloading ahead of a possible East Coast labor strike combined to push rates up sharply. Severe typhoon-driven congestion at Far East container hubs are likely also contributing to current rate levels. Carriers have increased blanked sailings for this week – possibly as moves to recover schedules disrupted by the storms – which could also help keep prices elevated even if demand has started to ease. The Panama Canal Authority has postponed an additional half-foot draft reduction for Neopanamax transits until further notice, though it is still bracing for drought conditions from the expected El Nino this year. The PCA reduced daily transits by four to 32 this month, though Neopanamax daily slots – used by long haul container vessels – have only been reduced by one. Asia-Europe container rates ticked down slightly last week to $4,500/FEU to N. Europe