How conflicts are impacting global supply chains

Worries around global supply chains are back in the news: This time, it’s not an unknown virus but the conflict in the Middle East that has added to concerns about the global economy. In April, the Federal Reserve Bank of New York’s global supply chain pressure index rose to its highest level in four years, believed to have been driven by disruption to shipping routes through the Strait of Hormuz.

A truce among the parties helped calm the waters in between, but it appeared to be short-lived. Hence, shipping through the strait, which had accounted for about 20% of global oil and gas exports in 2025,2 has faced renewed disruption.

The impact is being felt on global supply chains through four key channels: First, diminishing supplies of crude oil from Gulf countries have potentially pushed up prices. Second, exports of natural gas, which power households and factories, have faced disruption. Refined products such as diesel and aviation fuel, too, have seen notable price increases, with the conflict in Ukraine also adding pressure.

Third, global food production could face challenges as lower levels of fertilizer exports from the Gulf may affect crop yields, especially in Asia. Finally, the growing number of attacks on merchant vessels in Middle Eastern waters3 may be adding a new layer of risk and uncertainty to international trade.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →