Pegasus Market Update Q1 2026: No.25

All,

Lots of news this week, so this is more of a curated summary of critical points. For any questions or more detail, please feel free to reach out directly.

Middle East and Force Majeure

• All services by ocean and air suspended due to the current police action in the area (only congress can declare war)
• Cargo that has sailed or is arriving will be re-routed according to the carrier and their preference - likely Singapore or Colombo
• Carriers will re-structure sailings, schedules etc. and are in process of doing so - this will also affect other schedules in the area or traversing the area (India, Subcontinent etc.)
• It has not happened officially, but I will expect carriers to declare a force majeure if this continues which will enable them to discharge cargo at the nearest available port as a part of their schedule changes
• Force Majeure would also enable the carriers to immediately implement any increases and cancel any long-term agreements that are impacted
• Global average VLSFO bunker fuel price is now up 20% compared to last Friday. In Singapore, the price is up 33%, in Los Angeles it is up 25%.

Market and Rate Levels Expectation

• Carriers are in process of implementing increases as follows - this is from MSC - each carrier will have their own number, but expect something in the range of below:,
  • War Risk Surcharges of $3000/40'
  • GRI/PSS of $2000/40' applicable April 1 and War Risk Surcharges of $3000/40'
• War Risk would apply to export and import cargo whereas that GRI would be individual to the trade and carrier
• Expect spot rate increases for the Far East to begin on March 15 and additional rate increases April 1 and beyond for as long as the action continues
• Expect substantial Bunker Fuel increases TBA but across all trades

IEEPA Refunds Update, Section 122 Actions and Additional Lawsuits

On March 4, 2026, the U.S. Court of International Trade (CIT) directed U.S. Customs and Border Protection (CBP) to process IEEPA-impacted entries without IEEPA duties. CBP must liquidate any unliquidated entries that were subject to IEEPA duties without those duties, and CBP must reliquidate any entries that have liquidated but are not yet final to remove IEEPA duties.

What this means for you

• If your imports were assessed IEEPA duties and the entry is either unliquidated or liquidated but not yet final, the duties may be removed through liquidation or reliquidation in accordance with the court’s order.
• CBP will need to update affected entries in line with the court’s order. CBP has not yet published timing or operational steps for how it will complete liquidation and reliquidation and issue any resulting refunds or credits.
• Customs said that any validated refund of IEEPA duties would include interest, consistent with normal customs law. However, they also emphasized that several factors still affect whether and how refunds are issued, including the type of entry and the liquidation cycle.
• More importantly, CBP made clear that before any refund is finalized. It still intends to conduct a review to ensure there are no other customs issues tied to the entry. That includes checking whether other duties or fees may apply, such as anti-dumping duties, Section 301 tariffs, Section 232 tariffs, or other obligations.
  • In other words, refunds may be coming, but they are not going to be automatic or instantaneous. CBP is signaling that it intends to review entries carefully before releasing money and the Current Average for Protest resolution is 314 days - that's current "normal" circumstances and without the massive influx of requests that will happen. Identifying the entries, reconciling duties, confirming liquidation status, and protecting protest rights will require serious internal effort on an entry-by-entry basis (that's a whole lot of individual entries)
  • As mentioned previously, this protest/refund process if it holds, will take years to unwind. Manage your expectations accordingly.

Almost half the states in the U.S. sued the administration for imposing 10% global tariffs under Section 122, arguing that the tariffs are illegal because the intent behind the law was to manage a balance of payments crisis that is impossible in a world where the dollar is a free-floating currency.

The lawsuit, filed by 24 states at the Court of International Trade on March 5, was led by Oregon, Arizona, California and New York. Oregon also led a coalition of 12 states challenging the reciprocal tariffs. That case was consolidated with small businesses' complaints and was won at the Supreme Court last month.

The argument is straightforward - the states are saying the whole legal justification for Section 122 simply doesn’t exist. In their view, the crisis is about as real as the tooth fairy. Instead, they claim the tariffs are just another way for the White House to impose, tweak, and re-impose tariffs whenever the mood strikes — whether that’s through executive orders, policy memos, or the occasional late-night social media post.

They also took a swipe at the giant carve-out list. Apparently, there are about 80 pages of products that somehow escaped the tariffs, along with special treatment for certain countries.

Now the Court of International Trade gets to sort through yet another tariff lawsuit, which at this point is basically becoming the court’s full-time hobby. The court now has lawsuits over IEEPA tariffs, lawsuits over refund procedures, and now lawsuits over Section 122 tariffs.

Enjoy your weekend!

Author

Matthew Crocker

Chief Commercial Officer