The oil price surge is just one symptom of a supply chain network that is not fit for this age of global tensions

The escalating conflict between Iran, the US and Israel has taken a critical turn. The strait of Hormuz – one of the most important shipping routes for oil and gas – is facing significant disruption. The strait is the main route connecting Persian Gulf ports in Iran and some of the region’s other oil producers to the open ocean.

The strikes on Iran are already having tangible effects: energy flows are slowing, markets are reacting and supply chains are under pressure. This is not just a regional conflict – it is a global supply chain crisis unfolding in real time.

As an expert on supply chains, I am acutely aware of how central the strait is – not only for the stability of the region but also to the functioning of the global economy.

This narrow corridor is one of the world’s most critical chokepoints – around a fifth of the world’s oil passes through the strait daily. Its sudden disruption represents a “chokepoint failure” – a breakdown at a critical node that triggers cascading effects across global systems.

Tanker traffic has dropped sharply, with vessels waiting in surrounding waters as ship owners reassess the risks. Oil prices surged in response to the strikes and the threat to shipping routes. Analysts have warned that prices could climb significantly higher if the disruption persists.

But crucially, this reaction was not driven solely by actual shortages. Markets respond to uncertainty itself. The mere possibility that several million barrels per day could be disrupted is enough to push prices up, even before supply is properly hit. This reflects a broader feature of geopolitical risk: expectations and perceptions can be as economically powerful as material disruptions.

Because energy underpins almost every sector, these price increases transmit rapidly through supply chains. Higher fuel costs raise transportation expenses, increase production costs and ultimately feed into inflation across goods and services that eventually land with consumers.

The strategic importance of the Gulf states

The disruption is not confined to the strait. Instability across the wider Gulf region also affects the United Arab Emirates, as well as other strategically important energy producers and logistics hubs, such as Qatar, Kuwait and Saudi Arabia.

This dimension matters because the Gulf functions not only as an energy supplier but also as a crossroads in global trade and logistics.

Ports such as Dubai handle vast volumes of international shipping, linking Asia, Europe and Africa. As tensions spread, the reliability of these logistics systems is increasingly called into question.

The result is a shift to more widespread insecurity, where both energy flows and trade infrastructure – things like major container ports, shipping lanes, export terminals and storage facilities – are simultaneously at risk.

Energy is the heart of global supply chains. Manufacturing depends on electricity and fuel, transport relies on oil-based logistics and agriculture depends heavily on natural gas-derived fertilisers. When energy flows are disrupted or become more expensive, the effects propagate across entire networks.

Research on geopolitical crises shows that disruptions to key inputs such as oil and gas quickly translate into broader supply chain instability. This affects production, trade and the availability of goods far beyond the conflict zone. The Iran crisis reflects this dynamic. What begins as disruption in a maritime corridor can become a global economic issue within days.

For decades, global supply chains have been optimised for efficiency. This means that they concentrate sourcing and production in regions that minimise costs. This model has delivered large economic benefits, but it has also created weaknesses in the structure.

The concentration of energy flowing through a single chokepoint such as the strait of Hormuz exemplifies this trade-off. When it is disrupted, the system lacks resilience.

In response, supply chains are likely to accelerate efforts to diversify and invest in alternative energy routes and sources. Countries that are heavily dependent on oil transiting through the Gulf will seek to expand strategic reserves, diversify their import routes and invest in pipelines that bypass maritime chokepoints.

But at the same time, geopolitical instability strengthens the case for renewable energy, electrification and regional energy integration. Expanding solar, wind and green hydrogen capacity reduces exposure to concentrated fossil fuel corridors. And cross-border electricity connections can improve flexibility during shocks. In this sense, resilience is also an energy transition issue.

At the same time, instability in conflict-hit regions can fuel the rise of informal and illegal supply chains, particularly where governance is weakened. These can include things like unregulated oil trading, goods being smuggled through informal maritime routes and labour exploitation hidden within subcontracting chains.

What’s more, supply chains themselves are increasingly shaped by geopolitical forces, as states use trade, energy and logistics networks as instruments of power.

For consumers, this could mean greater price volatility, shortages and reduced choice as firms adjust sourcing strategies in response to sanctions, trade restrictions or security risks. In some cases, it may also mean higher costs over the long term, as businesses prioritise resilience over efficiency.

A turning point for globalisation?

The situation in the strait of Hormuz may mark a turning point in how global supply chains are understood. It has shone a light on a fundamental tension at the heart of globalisation. Efficiency depends on sourcing and production being concentrated in a few locations, but resilience depends on diversification. When critical links in the chain fail, the consequences extend far beyond their immediate location.

This war demonstrates that supply chains are not merely economic systems. They are deeply embedded in geopolitical realities. The challenge ahead is not simply to manage disruption, but to redesign supply chains and energy sources for a world in which geopolitical risk is no longer exceptional, but structural.

Maryam Lotfi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.