South African Businesses Urged to Prepare Now For Gulf Conflicts Supply Shocks

South African businesses should urgently stress test their supply chains and logistics dependencies as the escalating conflict in the Persian Gulf threatens to disrupt global oil flows, shipping capacity, and insurance cover.

That warning comes from Volker von Widdern, Head of Strategic Risk at Riskonet Africa, who says companies cannot afford to treat the crisis around the Strait of Hormuz as a distant geopolitical event.

Instead, he says, firms should begin preparing now for potential fuel price shocks, shipping delays and shortages of critical goods that could ripple through the South African economy.“South African businesses need to start asking difficult questions about their exposure to global logistics disruptions,” says von Widdern.“Many companies assume geopolitical conflicts are remote risks. In reality they can affect fuel prices, supply chains, and operational continuity very quickly.”

The Strait of Hormuz is one of the most strategically important energy chokepoints in the world, carrying about 20 percent of global oil shipments each day. Any disruption to the flow of crude oil and refined fuels through the narrow waterway can quickly destabilise global energy markets.For South Africa, which imports the bulk of its oil and petroleum products, the consequences could be immediate.

Another key resource supplied from the Middle East is fertiliser.

The region is a major source of sulphur, urea and ammonia. Disruption to these supplies can have substantial impacts on agriculture.

“South Africa is highly exposed to global oil and commodity markets,” von Widdern explains. “If supply through the Strait of Hormuz is restricted, oil prices will become volatile and local fuel prices will follow.”

Higher fuel prices would have knock-on effects across the economy, pushing up transport costs and feeding through into food prices, logistics expenses, and broader inflation.That in turn could create difficult choices for monetary policymakers.“If inflation accelerates because of energy costs, the South African Reserve Bank may have limited room to ease interest rates,” says von Widdern. “That would place further pressure on already constrained consumer spending.”

However, the risk does not end with energy prices.

Von Widdern says the conflict is already beginning to disrupt global shipping and logistics networks.Major shipping companies are restricting or suspending services in areas exposed to the conflict.

At the same time, marine and air cargo insurers have sharply increased war-risk premiums or withdrawn cover for vessels and aircraft operating near the region.

“When insurance disappears or becomes prohibitively expensive, logistics capacity shrinks rapidly,” he says.“For companies that depend on reliable shipping routes, which translates into higher freight costs, delays and supply chain uncertainty.”

South Africa’s economy relies heavily on maritime trade, with most imports and exports transported by sea. This means congestion and delays in global shipping networks can quickly affect local industries.

“South African manufacturers, retailers and wholesalers depend on steady container flows,” von Widdern says.

“If shipping capacity declines globally, the result is congestion in ports, delayed deliveries and higher logistics costs.”

Another emerging risk lies in the role the Gulf region plays as a global logistics hub. Airports and transshipment centres in the Middle East handle enormous volumes of air cargo and passenger traffic connecting Asia, Europe, and Africa. However, security concerns and infrastructure risks could undermine that role.

Attacks on airports or logistics facilities could significantly reduce the movement of people and high-value cargo that rely on rapid air transport.At the same time, large numbers of foreign workers and travellers are leaving parts of the region as security conditions deteriorate.

“The Gulf has developed into a crucial re-export and logistics hub for global trade,” von Widdern says.“If human resources and infrastructure capacity decline, the efficiency of those logistics systems will deteriorate.” In such a scenario, global re-export trade flows could begin shifting toward alternative hubs such as Singapore or Hong Kong, adding further complexity to supply chains.

For South African companies, the biggest risk may be hidden dependencies.

Industries such as aviation, healthcare, manufacturing, and energy rely on specialised components, spare parts and equipment that move through complex international logistics networks.

“Companies need to understand which parts of their operations depend on the uninterrupted flow of goods through these routes,” von Widdern says.“If critical spares or specialised equipment are delayed, operational disruptions can happen very quickly.”

He also warns that prolonged disruption could lead to shortages of certain consumer goods in parts of the Middle East, further straining global supply chains and container availability.

As the crisis continues, the risks will compound.

“The effects of disruption build over time,” von Widdern explains.

“A shock that lasts a few weeks is manageable. A disruption that lasts several months begins to reshape supply chains and increase costs across the system.”To mitigate these risks, von Widdern advises South African companies to undertake immediate supply chain risk assessments.

Businesses should map critical supplier dependencies, identify alternative sourcing options, and review logistics routes that may be affected by the Gulf crisis.Insurance cover and contractual arrangements should also be reviewed to ensure companies understand their exposure to logistics disruptions.

“Preparation is the key defense against geopolitical risk,” he says.

“Businesses that understand their supply chain vulnerabilities and build contingency plans will be far better positioned to manage the impact of global disruptions.”The conflict in the Persian Gulf may be geographically distant, but its economic consequences could arrive quickly through energy markets and global trade routes.

“The world’s supply chains are deeply interconnected,” von Widdern says.

“When a strategic chokepoint like the Strait of Hormuz and oil industry infrastructure in the Middle East are threatened, every trading nation needs to be prepared.”

Listen to Yvonne Mothibi IRMSA CEO on Middle East Tensions