International Container Terminal Services, Inc. (ICTSI) warned that a prolonged war in the Middle East could weigh on global trade and keep fuel costs elevated, but said the impact on its Iraq operations is being offset by stronger performance across its other terminals.

At the company’s stockholders’ meeting on Thursday, Chairman and President Enrique K. Razon Jr. said disruptions in key shipping routes are already affecting trade flows, particularly in Asia where ICTSI’s largest market is located.

“The longer the war takes to be settled, the larger the impact on the global economy. So if the war lasts for several more months, there will be a strong impact on global trade,” Razon said.

He noted that Asia is bearing the brunt of the disruption compared with Latin America, which benefits from proximity to major suppliers such as the United States, Canada, Mexico, and Brazil.

“It's mostly felt in Asia. Asia is the most affected by the closure of the Strait of Hormuz,” he said.

While ICTSI’s terminal in Iraq remains directly exposed to the conflict, Razon said the overall impact has so far been cushioned by the company’s geographically diversified portfolio.

Despite ongoing supply, rising fuel costs have added pressure to operations. Razon said diesel remains available but at significantly higher prices.

“As of today, there is still diesel supply but at a high price… and until the war is over or settled, prices will remain high,” he said.

To mitigate the impact of higher fuel costs, ICTSI has implemented tariff and handling rate adjustments across its global terminals.

“And this is why we have already implemented adjustments to our tariffs and handling rates to make up for the differential in diesel and fuel prices throughout our terminals in the world,” he added.

Razon said the company continues to coordinate with governments and agencies to help ensure stable fuel supply, particularly for the Philippines.

He expressed hope for a swift resolution to the conflict to restore normal trading conditions.

“Hopefully, the warring parties can end this soon, and we can get back to normal trading routes in the world,” he said.

ICTSI has set aside about $740 million in capital expenditures this year, higher than the $650.44 million spent last year, to fund expansions and upgrades across its global terminal portfolio.

Razon said the planned spending will mainly go to ongoing and new projects in Mexico, the Philippines, Brazil, and the Democratic Republic of Congo, including the completion of Phase 3B at Contecon Manzanillo and expansions at local terminals.

The budget will also cover new developments in Honduras, Australia, and Ecuador, as well as equipment acquisitions, upgrades, and maintenance across its operations.