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Global Economy Under Geopolitical Shocks: Energy and Supply Chains

Over the past five years, especially during and after the COVID‑19 pandemic, geopolitical crises have caused deep disruptions in global supply chains and the manufacturing sector. The pandemic triggered a supply chain crisis worldwide due to logistical disruptions, raw material shortages, and factory shutdowns, compounded by fluctuations in energy markets and emerging political risks. This vulnerability highlighted the need for supply chains to evolve from lean structures to resilience- and risk-focused models.

By 2026, geopolitical risks have triggered a new wave of economic shocks. Notably, military operations by the United States and Israel against Iran, followed by Iran’s retaliatory actions, brought maritime transport through the world’s most critical energy corridor, the Strait of Hormuz, to a near standstill. As the Strait of Hormuz handles about 20% of global oil trade and a significant portion of LNG (liquefied natural gas) flows, this disruption had serious effects on energy supply, prices, and indirectly on global supply chains (World Economic Forum).

The impact on energy markets has been pronounced. Oil prices have fluctuated sharply due to uncertainty and risk perception, reaching levels significantly higher than before. This situation directly affects not only the energy sector but also manufacturing, transportation, and agriculture, which rely heavily on energy inputs. Sudden increases in oil prices raise logistics costs and create uncertainty in accessing other critical inputs, such as natural gas (Anadolu Agency).

From a supply chain perspective, the closure of the Strait of Hormuz affects more than just energy supply; it also constricts global trade and production networks. According to academic sources such as Cornell University, the ongoing crisis increases production costs and transport risks for many essential inputs, including fuel and chemicals, creating the need to restructure supply chains. As a result, production plans face delays, cost increases, and inventory shortages (news.cornell.edu).

Moreover, the crisis disrupts agricultural commodity and fertilizer supply chains. The Strait of Hormuz plays a critical role in these supply lines, and interruptions in fertilizers and other agricultural inputs have led to price increases, threatening global food security. The United Nations and other international organizations have warned that these developments increase the risk of “systemic shocks” (Marsh).

Thus, geopolitical tensions now affect not only energy markets but also supply chain structures, production costs, and even food systems. Disruptions in energy and raw material flows lead to slower global trade, inflationary pressures, and decreased investor confidence. International organizations such as the United Nations Conference on Trade and Development (UNCTAD) have reported that disruptions in the Strait of Hormuz caused declines in trade volumes, price pressures, and financial stress (UNCTAD).

In conclusion, shocks to raw material and energy supply caused by geopolitical risks have long-term effects on product and service production, global trade flows, and investment environments. These shocks compel manufacturing companies to adopt strategies focused not only on costs but also on strategic resilience, supply chain visibility, and risk management.