Iran shut down the Strait of Hormuz, cutting off roughly 10% of the world's oil supply and a fifth of global liquefied natural gas last month [1][2]. The International Energy Agency described the loss as the largest in the history of the global energy market [2]. Tankers and gas carriers that once passed through Hormuz now take a long detour around South Africa's Cape of Good Hope, adding thousands of nautical miles and up to two weeks to many voyages [7]. War-risk insurance premiums for vessels in the Middle East have surged, adding several million dollars to each transit [8].
Corporate risk concerns spike
Nearly two-thirds of firms are worried about further supply chain disruptions and higher energy and commodity prices due to the war, according to a survey of 6,000 companies in 13 countries published by Allianz Trade on April 8 [3]. Geopolitical risk has become the top concern for two-thirds of firms, up sharply since 2025 [4]. Safety stockpiling reached the highest level in three years, according to GEP's March 2026 Global Supply Chain Volatility Index [5].
Supply chains diversify away from China
Companies that were heavily reliant on China are increasingly adopting the +1 or +2 approach to trade, adding at least one additional country to their supply chain to reduce risk [10]. India, Indonesia, Vietnam and Malaysia are benefiting the most from the +1/+2 approach, according to research [11]. Just-in-time manufacturing is increasingly giving way to a 'just-in-case' approach, with factories increasing inventory buffers [12].
Full impact still unfolding
The Iran war has highlighted how fast a disruption to critical raw materials such as oil, gas and fertilizers can ripple across global trade [6]. The full impact of the disruption has yet to be fully felt and will take months for the full effect to surface and for supply chains to stabilize once the Strait is fully reopened, according to Sebastian Janssen [9]. John Sfakianakis, head of economic research at Saudi Arabia's Gulf Research Center, said the Iran war 'is not so much a regional conflict as it is a stress test of how the international system functions under pressure' [13].
What to watch next
As the Strait remains closed, watch for further spikes in energy prices, continued shifts in global shipping routes, and accelerated diversification of supply chains away from China. The long-term resilience of the global trade system will be tested as companies and governments adapt to a new era of geopolitical risk.
