Could the Iran crisis reshape global supply chains again?

WHEN OIL TANKERS are blockaded in the Strait of Hormuz, the consequences can reach far beyond the Persian Gulf.

- Cesar Polvorosa, Jr.

For countries like the Philippines — an economy that imports almost all its oil — events thousands of kilometers away can quickly translate into higher gasoline prices, rising transportation costs and eventually higher food prices at home.Thus, the Iran vs US and Israel war that started on Feb. 28 has immediate economic implications for Asia. Iran commands control over the strategic Strait of Hormuz, which carries roughly one-fifth of global oil shipments, making it one of the most important chokepoints in the global trading system. When disruptions occur there, energy markets react almost instantly, sending price shocks through transportation networks, manufacturing supply chains and agricultural production systems.

The Philippines is particularly exposed. The country imports most of its crude oil from the Middle East, leaving it vulnerable to supply disruptions and price volatility triggered by geopolitical events in the region.

Recent diplomatic efforts illustrate how real these concerns have become. Manila has sought and reportedly gotten assurances from Tehran that Philippine-flagged vessels and energy shipments would be allowed safe passage through the Strait of Hormuz so that oil supplies and Filipino seafarers could continue moving through the vital route.

Such diplomatic moves amidst severe volatility reveal a deeper reality about globalization: international trade may be driven by economic efficiency, but it ultimately depends on geopolitical stability.

GLOBALIZATION'S HIDDEN ASSUMPTION