Iran war: Fuel crisis a ‘gut punch’ for forestry company in salvage mode

Friday, 27 March 2026

Steep increases in fuel prices are a “gut punch” for forestry companies that are already navigating the aftermath of devastating weather events, a representative of one says.

Petrol and diesel prices have skyrocketed by more than 35% since the current war in the Middle East began, and Iran blocked the Strait of Hormuz, an important global oil shipping route.

That’s a challenge in itself for forestry companies as it is a logistics intensive sector, and heavily dependent on diesel, OneFortyOne estate value manager Alex Tolan says.

But it’s not the biggest concern for his company.

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OneFortyOne, an Australasian company that owns 80,000ha of forests in Nelson, Marlborough and Tasman, is already in emergency recovery mode following huge storms in July and October last year.

Tolan says the two storms blew down about 5500 hectares of the company’s tree crops, which is well over 1.5 million trees, and recovering those trees is a time bound process.

“We are in salvage mode now and harvesting double what we would usually because we have to move as quickly as possible to recover the wood while it still has value.

“The recovery means we have already doubled the diesel we are using each day, and the increased costs we are now incurring are challenging.”

But any disruption or delay to fuel supply will significantly impact on the company’s ability to continue with the salvage work, he says.

“That has major consequences downstream as it increases the chances of that fallen timber losing its value over time, and also the longer the wind-thrown trees are not moved the more environmental and fire risks increase.

“Usually we could just leave the trees growing and not chop them down for a bit longer - as we did during Covid. But because we are in emergency mode we can’t, we have to keep going.”

For that reason, Tolan is hoping the company is not hit by significant fuel supply disruptions as a result of the fuel crisis.

It makes for an additional level of pressure that would not be there if the company was not in the midst of a storm recovery situation, he says.

“Coming so soon after the devastating storm events of last year it really feels like a gut punch, and the impacts go well beyond our business.

“Disruptions to forestry are felt very quickly when sawmills can’t get logs to process for timber, and they can’t get timber to the likes of Mitre10 and ITM, or to the ports for export.

“And two thirds of our trees grow on iwi land which is rented per productive hectare, so if we have an uneconomic area that could have an impact down the line for iwi income.”

Tolan believes forestry should be classified as an essential sector under a level two situation in the National Fuel Plan.

That’s because the sector supplies essential industries such as construction and agriculture, and provides thousands of downstream jobs, which is important in regional economies.

In the meantime, the company is constantly trying to find efficiencies across its operation because margins were tough even before diesel prices shot up, he says.

“We’re looking at how we harvest and load trees, for example. We are running 24-hours trucks with 24-hour port access. We are debarking logs in Nelson where previously it was done in Picton.

“And we are also diversifying our markets a bit - so we’ve sent two shipments to India recently. That’s a first for us.”