The escalating tensions surrounding Iran and the disruption of critical shipping lanes are prompting a stark re-evaluation of global trade vulnerabilities, with some experts suggesting the conflict could reshape supply chains more fundamentally than the COVID-19 pandemic. Companies are increasingly prioritizing resilience, moving beyond just-in-time models to a ‘just-in-case’ approach to mitigate future geopolitical risks.
Energy and Commodities Under Pressure
Iran’s actions, including the shutdown of the Strait of Hormuz, have sent shockwaves through global energy markets. The International Energy Agency reported that the loss of approximately 10% of the world’s oil supply and a fifth of global liquefied natural gas last month represented the largest disruption in the history of the global energy market. This acute supply-side blow, concentrated on energy and commodities, contrasts with the broader demand shock of the pandemic and the sustained supply chain shifts triggered by former US President Donald Trump’s tariff regime.
Sebastian Janssen, a partner at Oliver Wyman, a global management consulting firm, noted the similarities in impact despite differing shock types. “COVID exposed overdependence on a manufacturing hub, while Hormuz exposed overdependence on a transport corridor and on energy inputs,” Janssen told DW. While the pandemic saw factory shutdowns and port congestion, energy prices remained relatively stable. The current situation, however, has seen energy prices skyrocket, while non-energy trade has, thus far, held up better.
Rethinking Resilience in a Volatile World
Supply chain expert Lisa Anderson, president of LMA Consulting Group, believes the series of crises has fundamentally altered corporate risk assessment. “COVID got companies to the point where they realized they can’t just count on supply showing up when they need it,” Anderson stated. “The Iran war shows it was not a one-off event.”
The surge in oil, gas, and fertilizer prices has already forced governments to revise inflation forecasts, with the risk of wider disruptions in goods trade looming. Shipping companies are once again undertaking costly rerouting exercises, similar to those seen during the Red Sea attacks in 2023/24. Tankers and gas carriers are now taking extensive detours around South Africa’s Cape of Good Hope, adding thousands of nautical miles and up to two weeks to voyages. War-risk insurance premiums for vessels in the Middle East have also surged, adding millions of dollars to transit costs, which are subsequently passed on to consumers through higher prices for energy, chemicals, and manufactured goods.
Permanent Shifts in Global Trade?
The full impact of the current disruptions is still unfolding. Janssen cautioned that the scarcity’s effects are rippling through multi-tiered supply chains and will take months to surface fully once the Strait of Hormuz reopens. A survey of 6,000 companies across 13 countries by Allianz Trade found that nearly two-thirds are concerned about further supply chain disruptions and higher energy and commodity prices due to the war. This has led to an acceleration in plans for reshoring or nearshoring production and suppliers closer to home or to more stable neighboring countries, a trend particularly pronounced in Europe.
Geopolitical risk, encompassing wars and tariffs, has now become the top concern for two-thirds of firms, a significant increase since 2025. Companies that were heavily reliant on China are increasingly adopting a ‘+1’ or ‘+2’ strategy, adding at least one additional country to their supply chains to mitigate risk. India, Indonesia, Vietnam, and Malaysia are emerging as key beneficiaries, with growing interest also noted in Europe as a manufacturing destination.
The ‘just-in-time’ manufacturing model is increasingly being supplanted by a ‘just-in-case’ approach. Factories are rebuilding inventory buffers, with safety stockpiling reaching its highest level in three years, according to GEP’s Global Supply Chain Volatility Index. This mirrors the responses seen during the pandemic and under Trump’s tariffs, as companies sought to hedge against uncertainty and potential shortages.
As businesses prepare for a future potentially marked by further geopolitical shocks, from tensions over Taiwan to instability on the Korean Peninsula, resilience is being redefined. This requires flexibility, redundancy, and stronger strategic partnerships across the entire supply network. John Sfakianakis, head of economic research at Saudi Arabia’s Gulf Research Center, argues that vulnerability is now less about dependence and more about “resilience across interconnected systems” like energy, finance, logistics, and political cohesion. The Iran war, he suggests, is a stress test for the international system under pressure, potentially ushering in a new era of global trade dynamics.
