The conflict between the United States and Iran, which began on 28th February 2026, has introduced one of the most significant global supply chain shocks in recent history, effectively closing the Strait of Hormuz.
The disruption has halted or severely constrained the movement of oil and gas supplies, alongside a wide range of industrial commodities. The resulting shockwaves have not been confined to energy markets but have cascaded across transportation systems, raw materials, and strategic industries worldwide.
Taken together, these disruptions illustrate how a geographically localised conflict can generate system-wide effects, with implications for how organisations manage interconnected global supply chain risk.
Up to 20% of global crude and LNG flows (by traded volume) have been disrupted, forcing producers to suspend shipments and reduce output. The immediate and most visible impact has been on global energy markets: oil prices have surged sharply, in some cases exceeding $100 per barrel, with sustained upward pressure driven by uncertainty and constrained supply.
As the foundational input into almost all supply chains, this energy supply shock has propagated rapidly into downstream sectors, increasing operating costs and reducing predictability across production networks.
The conflict has effectively created a functional blockade of maritime traffic through the Strait, with vessel movements dropping by 70–95% and approximately 2,000 vessels stranded or delayed. This disruption is contributing to a gradual restructuring of global shipping patterns.
The withdrawal of war risk insurance and reduced access to Gulf ports (historically critical hub-and-spoke transshipment nodes) has forced shipping companies to reroute vessels away from the region. Many now divert around the Horn of Africa, adding 10–20 days to transit times between Asia and Europe and significantly increasing freight costs.
Restrictions on airspace, increased insurance costs, and higher jet fuel prices have materially increased airline operating costs. Airlines have responded by rationalising route networks and reducing flight frequencies, particularly on marginal routes. Air cargo capacity has also been constrained, as higher fuel costs have rendered air freight a less economically viable transport option.
The conflict has also exposed a critical, often overlooked dependency on the Gulf for non-energy materials, including petrochemicals, metals, sulphur, and naphtha, which are key inputs for manufacturing and chemical production. Given the region’s dual role as both a production hub and a transit corridor, disruption to shipping flows has had a disproportionate impact on global availability and pricing.
The Gulf is also central to global fertilizer supply chains, accounting for a significant share of traded volumes. This is contributing to rising input costs in the agricultural sector and creating systemic pressure on production. These pressures are compressing margins, reducing planting incentives, and creating risks to yields and food supply. The resulting impacts on food prices and food security may not be fully realised until subsequent growing cycles.
An equally significant impact lies in industrial gases. Helium, a by-product of natural gas processing and heavily sourced from the region, is at risk due to LNG disruption and logistical constraints. Similarly, CO₂ and other industrial gases tied to hydrocarbon processing are affected, with consequences for food processing, healthcare, and high-technology manufacturing.
These disruptions extend into strategic industries such as semiconductor manufacturing, where helium and other specialty gases are critical inputs with limited substitutes.
The cumulative effect of these disruptions is not purely operational, but structural.
Against this backdrop, many organisations consider themselves to be experiencing sustained disruption yet continue to operate largely through business-as-usual governance structures. If elevated costs, chronic delays, and sustained supply chain uncertainty represent the ‘new normal’, organisations need to redefine what constitutes a crisis in the contemporary environment.
The current geopolitical environment may provide the necessary impetus for organisations to rethink how they manage operational and supply chain risk. In place of siloed functional management, this situation presents an opportunity to reassess value chains and implement end-to-end, holistic risk management as a core enabler.
By integrating risk identification, monitoring, mitigation, and response within a cross-functional framework, operational resilience can act as an organising principle to support and inform business decisions.