Rising bunker prices are now hitting Swedish sawmill exporters on every trade lane, with the Strait of Hormuz closure driving up costs across routes and cutting off Middle East volumes, with no end in sight. That is according to Setra Group’s Olle Berg, Executive Vice President of market and business development at one of Sweden’s largest processors, who exports sawn timber, glulam, CLT, and structural components to Europe, North America, Asia, North Africa, and the Middle East.
And according to Berg, the damage was coming through on two fronts – one from high oil prices now feeding into bunker costs regardless of destination, and the other from direct shipments to the Middle East, with container prices, surcharges and risk premiums climbing exponentially.
“For Swedish sawmills, the volumes to the area are relatively small — but not insignificant,” Berg told a Timber Exchange webinar focused on the impact of the conflict on global sawmilling. “The reduction means that alternative markets and products need to be identified, especially for thicker timber classes in pine.”
The global sawmilling supply chain must ‘price in’ instability
In recent years, the Middle East and North African region (MENA) has emerged as one of the most reliable growth corridors for European sawn pine, with replacing structural-grade volumes at comparable price points not straightforward. The webinar, which also included Gregor Triltsch of Austria’s Pfeifer Group, ranged across shifting logistics routes and the question of how cost increases transmit through the value chain — with no easy answers on either front.
Berg was candid about the longer-term implications of the conflict. “A protracted conflict risks dampening the world economy and thus the global construction market, which could delay a recovery in the current economic situation,” he said, adding that for mills still waiting on a housing rebound, the crisis cuts deep.
It comes after Wood Central reported that up to 10 per cent of the global container fleet — 137 vessels — remains stranded in or near the Strait of Hormuz, with shipping companies now diverting cargo to Turkish ports and trucking structural timber overland into the UAE and Saudi Arabia, adding weeks to transit times and high cost to every consignment that gets through.
Even before the conflict, Sweden’s sawmilling sector was already staring down at least SEK 2 billion in new costs for 2026 — driven largely by EU Emissions Trading System reforms and a rail freight charge that has climbed more than 600 per cent since 2010. The extension of EU maritime climate levies adds further pressure. The new conflict could and will see costs rise further again.
For Setra, Berg’s answer is speed and range. “This requires flexibility, rapid adaptability and a continued strong presence in several markets. For Setra, this means we continue to work closely with our customers, follow developments closely and ensure that our products find the right way out into the world — even when the world around us is shaking.”
- To learn more about the impact of the Iranian crisis on the trade of global timber, including American hardwoods, click here for Wood Central’s special feature. And to learn about the impact of the crisis on fuel costs, click here for Wood Central’s series on Australian rural and regional diesel prices.
