Formula 1 teams are beginning to prepare for a return to racing next weekend after an unexpected break following the cancellation of the events in Bahrain and Saudi Arabia.
But the ramifications of those canceled races and repercussions from the continued uncertainty in the Middle East will continue to be felt by the sport.
“We obviously all hope that this (conflict) ends shortly,” Zak Brown, chief executive of McLaren Racing, told reporters on Wednesday. “But hope is not a great strategy. So you do need to have a strategy.”
The decision to call off the races due to the outbreak of the Iran War left a five-week gap in the schedule. It offered drivers a chance to rest and pursue outside interests, while teams could double down on their preparations for F1’s return to the U.S. city of Miami next week.
Attention has now firmly shifted to the sport’s first of three races on American soil this year as teams begin to send off their freight and equipment to Miami. A lot of this is coordinated by the F1 organization and its freight partner, DHL, but teams also use sea freight to move some equipment around the world.
F1 teams are already prepared for a dent to their revenues this year after losing Bahrain and Saudi Arabia from the calendar. Those events, originally scheduled for April 12 and April 19, are two of the highest-paying rounds on the F1 season, together contributing more than $100 million per year in hosting fees.
Hosting fees generated from races generated 26.7 percent of F1’s $3 billion in primary revenue last year, $1.4bn of which was paid back to teams through prize money.
“There’s a very large impact in terms of prize fund,” explained Racing Bulls team principal Alan Permane. “Of course, not having two races will hurt everybody. (But) There’s a benefit in terms of cost in not going to those races, because we don’t send people, so there’s obviously no flights, no hotel costs and no freight costs.
“Overall, it’s a negative, of course. There’s no doubt about it.”
Besides navigating a potential drop in their income from F1, teams are now bracing for a rise in costs, especially freight and travel across the globe, through the remainder of the season.
The effective closure of the Strait of Hormuz, one of the world’s key routes for oil transportation, has contributed to a significant rise in fuel costs that is now being felt by airlines. According to Platts’ Jet Fuel Price Index, jet-fuel prices have risen by more than 70 percent since the start of the conflict, and it is now at $200 in Asian markets — double its pre-war price.
Ships anchored near the shoreline on April 22, 2026, in Bandar Abbas, Iran. Iran’s Islamic Revolutionary Guards Corps said it had attacked and seized two ships near the Strait of Hormuz on that date as it tried to assert control over the critical waterway (Getty Images)
This is now being felt by consumers through increased flight prices or cancellations amid fears of shortages should the conflict continue. Permane said there will “inevitably be higher freight costs later on in the year” for F1 teams, barring a quick resolution to the conflict and fuel becoming cheaper again as a result.
“I think everyone can see that filling your car up is more expensive already, so filling your plane up will be very soon as well, I’m sure,” said Permane. “So yes, it will inevitably impact us, and those freight costs are inside the cost cap.”
F1’s cost cap polices spending across all 11 teams, covering all performance-related parts of their operations, as well as staff salaries and travel budgets.
It is intended to help make the sport financially sustainable for all teams and to encourage greater parity between the grid’s bigger and smaller operations. But because freight costs are within the cost cap — which increased from $135 million plus inflation to $215m for this season as part of a restructuring of F1’s financial regulations — any rise is going to have a knock-on effect to teams, and could eat into areas of their budget that would otherwise be spent elsewhere, such as on car development.
F1 experienced a similar situation in 2022 in the wake of Russia’s invasion of Ukraine, which also caused a spike in fuel and transport costs. At the time, some teams were concerned they might struggle to stay within that year’s cost cap (then $140 million) and felt constrained by staff salaries, which needed to be addressed due to rising inflation. The FIA, F1’s governing body, ultimately agreed to increase the cost cap by 3.1 percent to ensure teams did not risk noncompliance due to external global factors.
“I don’t believe there’s been any discussion about any mitigation there,” Permane said last week. “Again, it depends on how much (travel costs) go up.”
For now, it’s not on the radar as a deep concern for teams that may require cost-cap adjustments. But they will still be looking forward and accounting for all eventualities.
Part of the uncertainty stems from the stop-start approach to resolving the conflict. (A ceasefire is technically in place, but a second round of peace talks has struggled to get off the ground.) And there is always a lag before shipping disruptions show up as real costs.
“All of these factors, we have in our forecasts,” said Mercedes team principal Toto Wolff. “You know, (like) what are the worst-case scenarios for travel interruptions and for freight costs going up? And at the same time, the possible impacts on hosting fees and sponsorship (agreements). And obviously, Saudi Arabia and Bahrain (being cancelled) are already factored in.
“But like everyone in the world, we are hoping for a calming-down of the situation and things becoming more like normal, so it wouldn’t impact us going forward.”
Costs for F1 could rise significantly by the fall races, like the Singapore Grand Prix (Wan Mikhail Roslan/NurPhoto via Getty Images)
Beyond rising costs, teams may also have to adjust their freight travel plans later in the year if the uncertainty persists.
Although there are only two races outside of Europe — in Miami and Canada — from now until the end of September, the sport would then travel east to Azerbaijan and on to Singapore. It is then scheduled to conclude its season with a Middle East double-header in Qatar and Abu Dhabi.
According to The Economist, analysts tracking Hormuz shipping flows have flagged June as a possible inflection point – if disruption persists that long, Kpler global trade modeling projects that European jet fuel supplies will sharply decline.
Depending on disruptions to the Strait of Hormuz, teams may need to rely more on air than sea freight to transport some of their equipment, which would also affect sustainability. “I think it’s still fresh to us and we haven’t had to yet start reacting, but we’re going to have to,” said Brown. “Sustainability is always front of mind, but also making sure we get to each racetrack is first and foremost what’s most important.”
He added that F1 had a plan “in motion” to recover equipment still in Bahrain and the Saudi city of Jeddah, left behind when preparations for those now-canceled races got interrupted. None of it was essential to racing or had been needed for the first three events of the season; it was general garage gear and hospitality-related items such as chairs and tables.
Permane also said that Racing Bulls had “an eye on the calendar and (is) hoping very much that there’s a chance they reinstate one or both” of Bahrain and Saudi Arabia later in the year, but added: “We don’t really know anything, of course. Until the Middle East situation calms down, that won’t happen, but if it does happen, we could have a very busy end to the year.”
Quite where F1 would reschedule these races if they do become viable is unclear.
The calendar is carefully planned and leaves little wiggle room, potentially requiring some shuffling or perhaps extending the season beyond its current end date of December 6 in Abu Dhabi, which concludes a triple-header with Las Vegas and Qatar on the previous two weekends. And given that we are currently more than seven months away from the end of the season, it would be premature to make any firm plans.
All involved in F1 will continue to closely monitor developments in the Middle East and handle any rise in freight costs that may result from continued uncertainty in the region. The sport demonstrated, in its response to the start of the COVID-19 pandemic, that it can adjust and be flexible as needed, returning as the first international sport in July 2020 despite significant travel restrictions.
To Cadillac team principal Graeme Lowdon, the key was to be ready for all possible eventualities.
“There’s that old Mike Tyson adage, ‘Everyone has a plan until they get punched in the mouth’,” he said. “The key thing is to constantly be planning, which we do, but constantly be changing those plans, because we have to.”