The ongoing conflict in the Middle East is again revealing how fragile global supply chains have become as the world continues to shift from a post-Cold War order of globalization to a more multipolar model. This new paradigm is defined by multiple power centers, competing policy regimes, and diverging economic priorities.
Closing the Strait of Hormuz has interrupted around 20% of oil flows, with widespread knock-on effects beyond higher energy prices. For example, Asia faces shortages in fertilizer (impacting food supply), chemicals (tech hardware production), and plastics (autos and pharmaceuticals), sparking double-digit price increases for these inputs in just a few weeks’ time. Even a rapid reopening of the Strait could leave an “air pocket” as supply chains normalize slowly.
The conflict is a harsh reminder that geopolitics and commerce are intertwined as we shift from a global economy to security networks. Where trade barriers once steadily fell away, trade policy has turned more volatile and increasingly protectionist, prioritizing security and control. Forces that formerly appeared discrete (ie. geopolitics, energy, trade policy, and technology) are interacting and reshaping the flow of production, capital, and risk through the system.
1. Geopolitical risk has become the rule, not the exception
Although it may be tempting to view geopolitical disruptions as isolated events, they are an outgrowth of what is sometimes called the ‘New Washington Consensus.’ This shift is structural, not cyclical. In a break with post-cold War norms, we now see bipartisan embrace of tariffs, industrial policy, and supply chain intervention as tools of economic strategy. Tariffs introduced under one administration have largely persisted under the next, and elements of industrial policy now enjoys support on both sides of the aisle.
But realigning the system has become harder. Post globalization, supply chains are more intricate and production is more concentrated, while geopolitics are increasing the distance between suppliers and end markets. Reconfiguring production, especially for complex goods, takes more time and capital with greater execution risk than in the past.
2. Companies need an antifragile strategy — resilience is now part of efficiency
If geopolitical disruption is structural, the corporate response cannot be reactive. It must be intentional.
For decades, cost dominated supply chain optimization. Today, cost must be balanced by resilience, control, and geopolitical alignment.
