EU Lumber Exports to UAE Slid 14% — Then the Strait of Hormuz Closed

Why It Matters

The Hormuz closure threatens a fast‑growing export corridor, inflating logistics costs and squeezing European sawmills already burdened by regulatory expenses, which could dampen the region’s housing‑driven demand recovery.

Key Takeaways

• EU lumber exports to UAE fell 14% in Jan.
• Prices rose 6% month‑on‑month, 20% YoY.
• Hormuz closure forces rerouting via Turkey, overland trucking.
• Bunker costs and ETS reforms add billions in expenses.

Pulse Analysis

The Middle East has long been a growth engine for European timber exporters, with the United Arab Emirates serving as a key gateway for pine and spruce shipments. In January, Eurostat recorded a 14 percent drop in EU lumber volumes bound for the UAE, falling to 29,500 cubic metres. Despite the contraction, the average export price climbed 6 percent to $332 per cubic metre, already 20 percent above the same month a year earlier. These figures signal that Gulf buyers are shouldering higher costs even before the supply shock fully materialised.

The abrupt closure of the Strait of Hormuz has forced carriers to detour around the Turkish coast and shift a growing share of cargo onto overland truck routes through Saudi Arabia and the UAE. This rerouting adds weeks to transit times and inflates freight rates, especially as bunker fuel prices surge across all trade lanes. European sawmills, already grappling with a SEK 2 billion cost increase from EU Emissions Trading System reforms and soaring rail freight charges, now face an additional logistical bottleneck that could deepen the Q1 export decline.

Higher transport costs are feeding through to end‑users, but the price elasticity in the Gulf market appears limited; buyers continue to absorb premium rates to secure timber for construction projects. Analysts warn that a protracted Hormuz impasse could erode the momentum of the anticipated housing rebound in Europe, prompting producers to diversify into thicker timber classes or alternative markets. Monitoring the evolution of the conflict and its impact on bunker fuel benchmarks will be crucial for investors and policymakers assessing the resilience of the European timber supply chain.