Iran’s shutdown of the Strait of Hormuz has drawn comparisons with the supply disruptions of the COVID-19 pandemic and US President Donald Trump’s tariff regime. The pandemic exposed the world’s heavy dependence on China for manufacturing everything from electronics to medical gear, while Trump’s tariffs accelerated efforts to cut that reliance. The war in Iran has highlighted another weakness: how quickly a disruption to critical raw materials—oil, gas and fertilizers—can ripple across global trade.
The International Energy Agency described the loss of roughly 10% of the world’s oil supply and a fifth of global liquefied natural gas last month as the largest in the history of the global energy market.
Demand and then supply shock
While the pandemic delivered a broad demand shock and Trump’s tariffs prompted a sustained shift in supply chains, the Iran war has dealt an acute supply-side blow concentrated on energy and commodities. Sebastian Janssen, partner at Oliver Wyman, noted COVID exposed overdependence on a manufacturing hub, while Hormuz exposed overdependence on a transport corridor and energy inputs.
During the pandemic, factories shut, ships piled up at major ports and just-in-time systems buckled, though energy prices remained relatively steady. This time, non-energy trade has held up better so far. Supply chain expert Lisa Anderson says the back-to-back crises have changed how many companies assess risk: COVID showed supply couldn’t simply be relied on; the Iran war illustrates it was not a one-off event.
Hormuz disruptions far from peaking
Surging oil, gas and fertilizer prices have already forced governments to revise inflation forecasts, and the risk of wider disruptions in goods trade persists. Shipping companies have again been forced into abrupt rerouting — tankers and gas carriers that once passed through Hormuz now detour 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 surged, adding millions of dollars to each transit. Those costs are feeding into higher prices for energy, chemicals and manufactured goods.
Full impact pending
The added cost is only part of the challenge. Making supply chains more resilient is difficult because the full impact has yet to be felt. Janssen says scarcity is still rippling through multi-tiered supply chains and will take months for the full effect to surface and for supply chains to stabilize once the Strait is fully reopened. Nearly two-thirds of firms are worried about further disruptions and higher energy and commodity prices, according to a survey of 6,000 companies in 13 countries by Allianz Trade. The research noted increased plans to accelerate reshoring or nearshoring—moving production and suppliers closer to home—especially in Europe.
One way to avoid major choke points is to bring manufacturing closer to customers, Anderson said.
Geopolitical risk now seen as strategic
Beyond Hormuz, some changes in global trade may be permanent. The survey found geopolitical risk, including wars and tariffs, is now the top concern for two-thirds of firms. Companies heavily reliant on China are adopting a +1 or +2 approach, adding at least one other country to supply chains to reduce risk. India, Indonesia, Vietnam and Malaysia are benefiting most, and interest in Europe as a manufacturing destination is rising.
Just-in-time manufacturing is increasingly giving way to a “just-in-case” approach. Factories are raising inventory buffers, with safety stockpiling at a three-year high, according to GEP’s March 2026 Global Supply Chain Volatility Index. As companies prepare for more geopolitical shocks—from tensions over Taiwan to instability on the Korean Peninsula—many conclude true resilience requires flexibility, redundancy and stronger strategic partnerships across supply networks.
John Sfakianakis, head of economic research at the Gulf Research Center, warns vulnerability today is less about dependence and more about resilience across interconnected systems like energy, finance, logistics and political cohesion. The Iran war, he says, is not just a regional conflict but a stress test of how the international system functions under pressure.
Edited by: Srinivas Mazumdaru
