A Business Leader’s Guide
Have you seen social media posts like these recently?
- “$200 to fill my truck with Diesel ⛽ it’s ridiculous,” (Threads)
- “Nearly $200 to fill my Denali” (Facebook)
- “Wow! $92 dollars to fill my SUV, I used to pay $55” (Facebook)
These are the unintended consequences of what was to be a short kinetic military affair to free the northern hemisphere of a nuclear-armed Iran.
Instead, we’re now facing a lengthy global supply chain quagmire with no end in sight.
Since the start of the U.S.-Israeli-Iran conflict on Feb. 28th 2026 the goal of “Mission Accomplished” has morphed into “mission disaster,” economically speaking.
As such, the unanticipated fallout of the assault is the complete closure of the Strait of Hormuz, a waterway so important to global trade, it’s flipping many of the world’s economies upside down.
And as a business leader, you had best prepare now for the train headed ‘Strait’ at you.
—-
Did you know that about 20 million barrels of oil, roughly 20% of global supply once passed through the Strait of Hormuz each day? Another 20% of natural gas and 30% of global helium supply also floated through that narrow passageway.
What if all of a sudden, it all went away, choked off from global markets, instantly?
Well. It happened, and that was not the goal.
So, how did this “special military operation” get so far out of control?
What was once all about fewer nukes is now all about the higher cost and scarcity of oil, natural gas, helium, fertilizer, and a dozen other key commodity exports from the Gulf.
Which means higher prices for Gulf-dependent economies that have for decades relied on cheap and steady Persian Gulf resources.
But this is not what President Trump had counted on.
Many of the consequential ripple effects will take years to play out according to Harvard Economist Ken Rogoff in a recent interview with Charlie Rose, especially in Asia given the existential reliance on Gulf exports.
Meanwhile, here at home, U.S. analysts are calling this the ‘delayed shock effect.’ But it’s coming, nonetheless.
Tankers and container vessels shipped from the Gulf before Feb. 28th have since arrived and unloaded their precious cargoes at distant ports.
However, the subsequent closure of Hormuz has since stranded the next wave of goods, which means inventory and critical material reserves will run out in a matter of weeks if nothing changes.
Downstream users of industrial gases like helium for semiconductor manufacturing in Taiwan, fertilizers for farmers in America, and metal commodities including 9% of global aluminum for autos, all sit like hostages awaiting reprieve aboard giant cargo flotillas stranded in Gulf waters.
The Center for Strategic and International Studies perfectly details the 187 stranded container-ships and cargoes choked off by the closure. Click the link and see for yourself the order of magnitude at risk, just sitting there.
In the meantime, here in the U.S., while $4+ per gallon average gas prices at the pump are a costly nuisance making headlines on social media, for manufacturing stalwarts in Asia including China, Taiwan, Japan, South Korea and the Philippines, without these cargoes it’s an existential slow motion economic train wreck in the making.
Unfortunately, there’s nowhere to hide.
Products from petroleum to plastics all come from refined oil processes amazing as it sounds. Most of human physical product innovation relies on Earth’s fundamental goo and gas stashed underground.
Adding together all commodities from the Persian Gulf, from oil to fertilizer, the world is expected to lose an estimated $4.6 trillion in global GDP, reaching $39 billion per day by this summer.
Yikes!
Who could have guessed the widespread impact of shutting down the Persian Gulf trade would have on global economies? The Trump administration certainly did not…
Energy analyst Reid I’Anson at Kpler, a global commodity research company, puts it perfectly:
“Regardless of when the Strait reopens, the energy security calculus for every major importing nation has changed permanently. Investment in pipeline diversification, strategic storage capacity, and supply chain resilience will define the commodity infrastructure agenda for the next decade.”
And despite our energy independence with eyes wide open, the U.S. is not entirely immune.
In the last 3 years post-COVID, economists and I were predicting a recession as supply chains and inflation gripped the nation. But it never happened. The strong job market and consumer spending kept the plates spinning well enough above the waterline to avoid drowning.
But this time it’s different.
Today, with oil prices escalating and sustained prices per barrel topping $115, the R word has once again resurfaced on a global scale. The IMF says if the Strait stays closed global GDP will likely fall into recession this year.
In the U.S., analysts at J.P. Morgan and Goldman Sachs have warned that the Strait of Hormuz closure is “derailing the soft-landing narrative.”
They argue that the surge in oil prices is acting as a tax on the U.S. consumer, reducing discretionary spending and increasing the likelihood of a technical recession in the second half of 2026.
This time, however, a recession would be a self-inflicted supply-side gunshot wound to the gut.
So. What are business leaders doing about it?
For the first time in modern history, trade and logistics are being completely reconfigured, according to industry tracker FleetPoint. This reconfiguration is not merely a temporary detour; companies are actively reducing their reliance on the Strait as a single transit point.
And you can be certain that wave of change will increase the cost of goods for thousands of businesses and millions of consumers.
Airlines, like Spirit, which cited the high cost of jet fuel in its recent shut down of operations is a prime casualty example of the fallout.
Agriculture too, where dozens of farmers have filed bankruptcy as a consequence of skyrocketing fertilizer expense, are also reeling from the conflict.
More broadly, take a look at Taiwan Semiconductor (TSMC), the world’s leading manufacturer of computer chips designed by Nvidia, the world’s leading AI infrastructure company. Together they stand atop a super fragile $1.5 trillion in AI investment in the U.S. alone. (Read my article: It’s 2026. Can Your AI spell ROI? at CEOWorld Magazine)
If TSMC fails to import enough helium from Qatar in the Gulf, they may need to idle chip production soon. That will effectively crash U.S. tech stocks and take much of the high-flying S&P with it, as AI investment capex is the only thing holding our GDP above water this year.
So. If the writing is on the wall and prices are headed higher in your industry space, it’s time for an all-hands on deck meeting before you get idled. Communicate the situation to every employee and what they can do about it.
If you suspect trouble ahead, roll up your sleeves and play the role of your suppliers. Dig into the numbers and respond aggressively.
If they source from the Persian Gulf side of nations in the Middle East, call and chat with them directly. Ask them if their input costs are creeping up and which ones from raw materials and energy to packaging and transport are most affected, and if/when they expect to raise prices.
Finally, prepare your team to squirrel away business-critical inventory and components before price pressures and scarcity disrupt your efficient supply chain and production throughput.
This time survivors will need to stay two moves ahead, not like we did during the global COVID shutdown debacle, remember?
That’s just the name of the game we’re playing this year, unfortunately.
—–
In summary, the crisis in the Middle East and shutdown of the Strait of Hormuz notwithstanding has added oil to the embers of a smoldering global recession. And it’s a far more widespread conflagration than just prices at the pump for Americans in the weeks ahead to be aware of.
If the Strait doesn’t reopen soon, the damage will continue to compound and could destabilize the economies of the world’s key manufacturing and exporting countries, aka your suppliers, which to me is a glaring red alert call to action.
The bottom-line Best Practice approach for business leaders impacted at this point is knowledge, stay informed, and add a hyper-concentrated ground level production and operations work-plan to navigate the balance of 2026.
Stay frosty and stay in front of this. Let’s not get blind-sided again.
Make sense?
Rick
—-
About the author: Rick Andrade is an investment banker and market advisor in Los Angeles, Ca, where he helps CEOs and business owners buy, sell, and finance middle-market companies. Rick earned his BA and MBA from UCLA, along with his Series 7, 63, & 79 FINRA securities licenses. He is also a CA Real Estate Broker and blogs at www.RickAndrade.com on issues important to business owners. He can be reached at rickandrade.com.