As the war in Iran continues, the reopening of the Strait of Hormuz will not be a light-switch event for global trade. Even if hostilities cease today, the long tail of recovery involves clearing naval mines, renegotiating high-risk insurance premiums and untangling a massive maritime backlog.
“The United States and Israel have made quick work of Iran’s heavy artillery and navy … but Iran’s grip over the Strait of Hormuz has proven much trickier to pry back,” notes Barron’s. “The fate of global energy markets — and the global economy — rests on whether ships can traverse the 22-mile-wide waterway from the Persian Gulf to the Gulf of Oman, through which 20% of the world’s oil and liquefied natural gas passes.”
Unfortunately, there’s no clear plan in place to reopen the Strait. And if the closure continues, experts forecast oil prices will climb to as much as $150 per barrel, “a level that could send the United States and other economies into recession,” Barron’s predicts.
This isn’t to say oil has been completely blocked. According to PBS News, about 90 ships have sailed through the Strait since the war began, mostly vessels unregulated by Western governments. Iran has also exported more than 16 million barrels of oil to buyers in China, India and Pakistan. Basically, the Strait is “closed selectively” while allowing certain Iranian exports through.
I recently spoke with Former Secretary of Commerce Gina Raimondo about navigating geopolitical risk in this time of uncertainty. She warned that, while the U.S. involvement may conclude soon, the risk of miscalculation could lead to a "protracted war." Even after the Strait of Hormuz is secured, the recovery long tail remains daunting: Clearing the passage will take weeks, realigning global logistics will require another three months, and fully rebalancing supply networks will likely take at least half a year.
This shift suggests that we are no longer managing a temporary shock, but a fundamental structural change. With a decade of potential disruption ahead, the region's instability necessitates a move toward deliberate redundancy. Raimondo advises supply chain leaders to "pay the price for more resilience" to prepare for this new reality. Her mandate for executives is clear: Shore up balance sheets now to withstand a radically less predictable global landscape.
New structural realities
From maritime backlogs to long-term network rebalancing, global volatility requires end-to-end strategy and specialized logistics. Start by watching the webinar with Former Secretary Raimondo. Then, equip your leadership to build resilient, redundant networks with the APICS Certified Supply Chain Professional desigation. Finally, look to the Certified in Logistics, Transportation and Distribution program for industry-leading education on logistics frameworks, metrics, network design, transformation and ongoing improvement. Start your journey today.
