20% of Global Supply Chain oil flows through Iran – Disruptions to come?
There’s reason to be concerned about your supply chain gas prices with another global conflict. The attack on Iran by the United States and Israel has closed the Strait of Hormuz where 20% of the world’s oil flows.
Crude oil will increase first with refined petroleum (gasoline) following soon thereafter. Experts estimate that gas prices will top $3/gallon in the near future while supplies are disrupted.
What does this mean for your supply chain, you might ask? Well, it means that your overland freight could be impacted. Depending on where you’re sourcing your product, manufacturing costs could also rise along with cargo ship freight. However, the primary impact will likely be seen in the logistics realm. Whether you’re nearshoring or procuring goods from southeast Asia, you’ll likely be incurring a little bump in logistics costs. This is also when top notch strategic sourcing talent can come into play who will help offset some of the price spikes.
According to Reuters, “Global benchmark Brent crude jumped 10% to about $80 a barrel over the counter on Sunday on the escalating impacts, and some analysts are predicting Brent could touch $100 as the Middle East plunges into a new war.”
Some folks are also asking whether the tariff ruling and illegality of these costs could offset a spike in fuel costs. Also, some of those tariffs will be redeployed in a legal manner.
One of the best ways to combat these sudden disruptions is to ensure that your supply chain team is optimized with the best talent. Continuing to build your supply chain teams with quality logistics talent will only bolster your competitive angle in disrupted times. Someone will hire these talented individuals who can immediately optimize your supply chain team to weather these storms. Don’t let it be your competition.
