Global Supply Chain Crisis: What’s Breaking in Energy & Manufacturing (and How to Respond)

Maritime transport accounts for 80% of global trade volume, facilitating 50% of global trade by value. The effective Strait of Hormuz closure has already reshaped energy markets. The ever-fragile ceasefire negotiations between the US and Iran ended in Pakistan over the weekend, spurring threats from the United States government to blockade Iran’s ports. Considering the continued conflict in the middle east, Seraph has conducted a full global supply chain analysis based on the latest shipping route and trade data across over 5,000 products to uncover the specific flows of certain goods through critical maritime chokepoints.  

The Hormuz Crisis: Energy first  

The Hormuz crisis primarily triggered an energy chokepoint — a fifth of the global oil trade transits this waterway. There is some relief via alternative routes like Saudi Arabia’s East-West Pipeline, but they can only sustain at most a quarter of pre-war flows. LNG has no pipeline alternative — it can only move by tanker, and Qatar’s Ras Laffan production complex, the world’s largest, lost two of its fourteen production units to Iranian strikes and won’t return to full capacity before late summer at the earliest.  Even when the strait reopens, recovery is bound to outlast the conflict itself. 

Nonetheless, there has still been a direct impact on physical goods. We approximate that Hormuz carries roughly $33 billion in automotive related trade, three quarters of which being finished vehicles to gulf states with no maritime alternative. Our analysis shows that other materials disproportionately routed through Hormuz include sulfur (24% of world trade), methanol (19%), LDPE polyethylene (17%), urea (16%), styrene (16%), and HDPE polyethylene (12%). Europe sources 40% of its polyethylene imports and 55% of its polypropylene imports from the region. We estimate that over 40% of the global ethylene glycol supply (a key ingredient in antifreeze/coolant and PET) transits the strait.  

The prices of key raw inputs into the manufacturing process are also surging. Aluminum has spiked to four-year highs — a direct consequence of the 9% of global supply that transits the Strait of Hormuz. 

The Bab el-Mandeb: A manufacturing chokepoint emerges 

Throughout this conflict, Iran has consistently threatened to use Houthi rebels in Yemen to blockade transit through the Bab el-Mandeb Strait as a countermeasure against further U.S. incursion into the Strait of Hormuz. These threats were renewed as recently as this weekend via Iran’s state broadcaster. The strait is a 29 kilometer wide passage between Yemen and the Horn of Africa — the southern gateway to the Suez Canal. Although crossings have reduced by more than 50% since the 2024 Houthi disruption, further blockades would expose vast swathes of supply chain risks worldwide. Prediction markets are currently pricing in a 16% probability for an effective closure of the Bab el-Mandeb Strait by the end of April, a statistic that has wavered between 10%-46% since the beginning of the conflict. A third of European imports transit through the strait. 

Nearly a fifth of the worlds aluminium trade transits the Bab el-Mandeb. Beyond aluminium, the bulk of the goods traversing the strait are either components or finished products. We evaluate that around 13% of automobiles and automotive adjacent products are traded through the Bab el-Mandeb. Over 15% of the world’s car tire trade ($8.1 billion), 16% of styrene-butadiene rubber (the main synthetic rubber used in tire manufacturing), and 37% of agricultural tires all flow through this single strait.  

Roughly a third of the shipments are completed or near-completed vehicles, with the other two thirds automotive components. Our analysis shows that automotive trade is heavily directional; European carmakers source vast amounts of their parts from Asia, but 61% of China’s vehicle imports arrive via the Bab el-Mandeb — we calculate the finished vehicles category is predominantly European luxury brands heading east. 

Consumer durables are among the most concentrated in the finished products category: 40% of the world’s vacuum cleaner trade, 25% of microwaves, 22% of washing machines, and 20% of ovens and cookers all transit the Bab el-Mandeb.  

If the strait were to close, our supply chain modelling shows that rerouting via the Cape of Good Hope at the bottom of South Africa would add a median of 12.5 days to affected shipments, with approximately a quarter of all global manufacturing shipping routes disrupted. For automotive parts specifically, 28% of routes would be affected. Plants running on just-in-time inventory would exhaust their buffers within the first week or two should a further geopolitical crisis unfold. 

This extended shipping time compounds: each rerouted vessel’s round-trip increases by roughly 60%, meaning it delivers around 40% fewer annual voyages — effectively reducing capacity on affected routes by two-fifths. 

Critically, Saudi Arabia’s pipeline workaround also depends on the Bab el-Mandeb. Every barrel currently flowing through the East-West Pipeline exits via the Red Sea port of Yanbu. If this gate closes, the energy bypass dies too. 

A new paradigm: How you can prepare 

Even when Hormuz reopens, the aftershocks of this supply crisis will be felt for lengthy duration afterwards. Tankers will take months to reposition, and shipping insurance premiums will remain elevated. Damage to key infrastructure could take years to fully repair. 

So far this decade, once ‘black swan events’ are becoming less rare – we are seeing a new reality where geopolitical volatility and recurring disruptions are commonplace, leading to persistent high impact events that cause uncertainty for business. The old realities of just-in-time manufacturing and long-term planning horizons are less promised nowadays. More expensive regional sourcing and supplier diversification are tempering volatility for our clients. 

We recommended that you begin to understand your exposure via dedicated Risk Modelling and Impact Analysis, and that you work to establish an Office of Resilience or similar function. If your purchasing and supply chain teams haven’t explored the specific impacts to your business, your customers, and your suppliers, let’s talk here about how you can build that capability.