Attention has now firmly shifted to the sport\u2019s 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.<\/p>\n
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.<\/p>\n
Hosting fees generated from races generated 26.7 percent of F1\u2019s $3 billion in primary revenue last year, $1.4bn of which was paid back to teams through prize money.<\/p>\n
\u201cThere\u2019s a very large impact in terms of prize fund,\u201d explained Racing Bulls team principal Alan Permane. \u201cOf course, not having two races will hurt everybody. (But) There\u2019s a benefit in terms of cost in not going to those races, because we don\u2019t send people, so there\u2019s obviously no flights, no hotel costs and no freight costs.<\/p>\n
\u201cOverall, it\u2019s a negative, of course. There\u2019s no doubt about it.\u201d<\/p>\n
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.<\/p>\n
The effective closure of the Strait of Hormuz, one of the world\u2019s key routes for oil transportation, has contributed to a significant rise in fuel costs that is now being felt by airlines. According to Platts\u2019 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 \u2014 double its pre-war price.<\/p>\n
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\n Ships anchored near the shoreline on April 22, 2026, in Bandar Abbas, Iran. Iran\u2019s 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)<\/p>\n
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 \u201cinevitably be higher freight costs later on in the year\u201d for F1 teams, barring a quick resolution to the conflict and fuel becoming cheaper again as a result.<\/p>\n
\u201cI 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\u2019m sure,\u201d said Permane. \u201cSo yes, it will inevitably impact us, and those freight costs are inside the cost cap.\u201d<\/p>\n
F1\u2019s cost cap polices spending across all 11 teams, covering all performance-related parts of their operations, as well as staff salaries and travel budgets.<\/p>\n
It is intended to help make the sport financially sustainable for all teams and to encourage greater parity between the grid\u2019s bigger and smaller operations. But because freight costs are within the cost cap \u2014 which increased from $135 million plus inflation to $215m for this season as part of a restructuring of F1\u2019s financial regulations \u2014 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.<\/p>\n
F1 experienced a similar situation in 2022 in the wake of Russia\u2019s 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\u2019s cost cap (then $140 million) and felt constrained by staff salaries, which needed to be addressed due to rising inflation. The FIA, F1\u2019s 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.<\/p>\n
\u201cI don\u2019t believe there\u2019s been any discussion about any mitigation there,\u201d Permane said last week. \u201cAgain, it depends on how much (travel costs) go up.\u201d<\/p>\n
For now, it\u2019s 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.<\/p>\n
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.<\/p>\n
\u201cAll of these factors, we have in our forecasts,\u201d said Mercedes team principal Toto Wolff. \u201cYou 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.<\/p>\n
\u201cBut like everyone in the world, we are hoping for a calming-down of the situation and things becoming more like normal, so it wouldn\u2019t impact us going forward.\u201d<\/p>\n
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\n Costs for F1 could rise significantly by the fall races, like the Singapore Grand Prix (Wan Mikhail Roslan\/NurPhoto via Getty Images)<\/p>\n
Beyond rising costs, teams may also have to adjust their freight travel plans later in the year if the uncertainty persists.<\/p>\n
Although there are only two races outside of Europe \u2014 in Miami and Canada \u2014 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.<\/p>\n