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Warehouses around the world incurred higher energy cost in the first quarter of 2026 as an immediate impact of increased oil prices after the United States-Israel attack on Iran in end-February, according to Ti Insight
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The continuing war in the Gulf will be a key driver for the storage sector in the short to medium-term
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Quarterly energy expense increases were recorded in Europe, North American, and North East Asia, where the highest movement was seen
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Rental rates increased in all regions
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In Asia, excluding China, overall leasing momentum should remain strong, driven by expansions and upgrades by 3PL and e-commerce firms
Warehouses around the world incurred higher energy cost in the first quarter of 2026 as an immediate impact of increased oil prices after the United States-Israel attack on Iran in end-February, and the continuing war in the Gulf will be a key driver for the storage sector in the medium-term, according to Ti Insight.
“The Iran-US conflict and subsequent disruption to the Strait of Hormuz has replaced the US-China trade war as the dominant swing factor for warehousing demand this quarter, pushing energy prices higher and rippling through operating costs, goods production, and factory gate prices across every region,” Ti Insight said in its latest Warehouse Tracker report.
Quarterly energy expense increases were recorded in Europe, North American, and North East Asia, where the highest movement was seen.
In Europe, which was the only region that had increased energy cost in the last quarter of 2025, again had a spike of +3.1% quarter-on-quarter (QoQ). Ti Insight pointed out that on a year-on-year (YoY) basis, it is essentially flat +0.4%, which is still consistent with energy cost stabilization after the volatility of 2022-2023.
North American energy costs also rose at a modest +1.2% QoQ.
North East Asia saw an increase of +3.9% QoQ and +3.3% YoY.
The report by the logistics and supply chain market research and analysis firm was finalized before this week’s renewed exchange of attacks between the US and Iran, and when global oil prices were already on a downtrend following peace negotiations between the two countries.
Nonetheless, Ti Insight said LNG (liquefied natural gas) prices and the wider energy market would still be under upward pressure even with the regulated reopening then of the Strait of Hormuz because of lower production from Qatar following damage to facilities – from both the war and a recent accident.
Rent
For rental rates, European warehouses were the highest among regions, climbing to 130.6 index points, up from 128.3 in Q4 2025, and up 6.6 points against the same period last year.
Supply in select European countries remains in short supply, as desirable locations are at capacity. Further, centrally located and modern energy-efficient buildings are also in short supply as there has also been reduced construction activity in the continent. The situation is bound to keep pushing rents higher in the medium to long term, Ti Insight said. It also cited research from JLL, which indicates that landlords continue to leverage incentive packages, offering longer rent-free periods while increasing capital contributions for build-outs to secure long-term leases.
North American rents recovered slightly, with the index rising to 120.6 in the first quarter, up from 119.0 the previous quarter, but a decline of 2.5 points YoY.
“After several years of increasing warehouse rents, US rates have remained essentially flat in Q1 2026. Growth continued in some regions, while coastal cities are experiencing a rent correction after large increases seen in 2022,” the Ti report said, and forecasting that rents will stabilize in the short to medium term.
In Asia, rent moved up 107.9 from 107.4 QoQ, marking a rise of 3.4 points YoY. High demand in Tokyo pushed prices up while rates in China declined due to high vacancy rates. Overall, leasing momentum in the rest of the region should remain strong, driven by expansions and upgrades by 3PL and e-commerce firms.
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Looking ahead towards the rest of the year, the situation in the Middle East and the consequential effect on passage through the critical Strait of Hormuz “will likely do more to shape warehousing demand through the amount of disrupted production of goods over the coming two quarters than underlying occupier fundamentals.”
