Despite talk about the end of the U.S. invasion of Iran, the war rages on. The Strait of Hormuz remains effectively closed to cargo ships and oil tankers, delaying shipments and raising prices on everything from plastic packaging to medical supplies. 

Since the conflict began, there has been a 97% decrease in the number of ships passing through the Strait. The logistics of moving goods has become a balancing act of cancellations and rerouting, as many carriers refuse to enter the region due to safety concerns and the sharp increase in insurance premiums. Experts expect the cost of oil to remain at more than $100 per barrel for at least another month, possibly reaching $115 by this summer.  

Of course, this affects much more than gas prices. Packaging Insights notes that the disposable plastic wrapping for perishables also requires oil when manufacturing. “Fragile food categories such as produce, eggs and proteins are especially exposed because they rely on fast and consistent movement with minimal buffering. When flow is interrupted, small delays can lead to spoilage or compromised product integrity.”  

Pharmaceuticals are also at risk. According to CBS News, the United States gets half of its generic medications from India, one of the many nations that “rely heavily on the Strait for medication transport.” There has already been a 25% drop in the export of drugs — most notably high-volume generics including blood pressure medications, statins and antibiotics. Furthermore, temperature-sensitive medications that are usually shipped via air are being affected, with many of the region’s airports shuttered.  

Pharmaceutical companies also rely on the waterway to ship petrochemicals used in solvents, coatings, IV bags, syringes and even condoms. Karex, the world’s largest condom manufacturer, is planning to raise prices 20-30%, per Reuters: “Since the conflict began, Karex has seen costs increase for everything from synthetic rubber and nitrite [to] aluminum foils and silicone oil.” 

The nitrogen used to stabilize synthetic rubber and the nitrates that fuel crop growth both rely on a steady flow of ammonia-based feedstocks. Consequently, the closure of the Strait of Hormuz has also triggered a bottleneck in the global supply of fertilizers. According to the World Economic Forum, the global price tag for logistics and energy-dependent inputs began with an immediate 15% baseline increase in crude oil. This translates to a compounding landed cost surcharge for agricultural inputs that must now be rerouted around the Arabian Peninsula. These delays are likely to cause significant yield losses and sustained volatility in food commodity prices. 

Stay informed for better decision-making 

Shipping across the Strait of Hormuz may never return to normal, predicts The New York Times: “No matter what happens next, Iran will not forget how easy it is to strangle shipping through the strait, meaning that energy companies and consumers must prepare for a very different future.”  

ASCM offers many ways for you to navigate this future by keeping up with current events and shifting supply chain trends: 

• ASCM Insights: Bookmark our blog for frequent analysis from industry experts about the frontline of global trade, sustainability and digital transformation. 

• Supply Chain Signals: Subscribe to our weekly newsletter for a consolidated, easy-to-read update on the logistics, procurement and technology news that is reshaping the global landscape. 

• The Chain Podcast: Listen to the stories of true supply chain visionaries. Our most recent episode explores strategies for advancing from reactive to forward-thinking trade — a topic that becomes more relevant every day.