Oil price rise shows how global supply chains are vulnerable to geo-politics
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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.
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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...