<
https://theconversation.com/the-oil-price-surge-is-just-one-symptom-of-a-supply-chain-network-that-is-not-fit-for-this-age-of-global-tensions-277277>
"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.
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 could climb
significantly higher if the disruption persists.
But crucially, this reaction was not driven solely by actual shortages. Markets
respond to uncertainty itself. The mere possibility that several million
barrels per day could be disrupted is enough to push prices up, even before
supply is properly hit. This reflects a broader feature of geopolitical risk:
expectations and perceptions can be as economically powerful as material
disruptions.
Because energy underpins almost every sector, these price increases transmit
rapidly through supply chains. Higher fuel costs raise transportation expenses,
increase production costs and ultimately feed into inflation across goods and
services that eventually land with consumers."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
