Industry Impacts from War in Iran

Supply Chain Shocks from War in Iran

Escalation of the Iran conflict and the associated risk to the Strait of Hormuz represent one of the most acute supply chain shocks since the early phases of the Russia-Ukraine war. While energy markets have been the immediate focus, the implications extend far beyond oil and gas. According to a Roland Berger analysis [Auto Care members can access the report here], ~30% of global seaborne oil trade and 20% of liquefied natural gas (LNG) flows transit the Strait of Hormuz, along with a significant share of global trade in petrochemicals, fertilizers, and critical materials essential to modern manufacturing processes.

For automotive aftermarket executives, the relevance is direct and material: plastics, resins, specialty chemicals, aluminum, and logistics capacity underpin everything from replacement parts and packaging to distribution economics. Even companies with limited direct exposure to Middle Eastern sourcing face cascading impacts through Asian suppliers and globally connected, multi-step value chains.

Trade Flow through Strait of Hormuz

Gulf exports routed through the Strait account for ~45% of global sulfur and urea trade, 25% of polyethylene, 35% of helium, and meaningful shares of aluminum and specialty minerals such as celestite. Unlike crude oil, many of these commodities lack strategic reserves, scalable substitutes, or meaningful bypass capacity.

Pipeline alternatives can offset only an estimated 15-20% of oil volumes, and they offer little relief for petrochemicals or specialty materials. As a result, any prolonged disruption tightens global supply across multiple value chains simultaneously.

Selected Commodities Highly Exposed to Hormuz Disruption

Roland Berger [Auto Care members can access the report here]

Wide Impact on Global Trade

According to Roland Berger, Asia absorbs roughly 80% of the oil and a majority of petrochemical and material exports transiting Hormuz, making China, India, Japan, and South Korea the most directly exposed regions.

Not surprisingly, the downstream consequences are global: many automotive components sold in North America and Europe rely on production of intermediate parts throughout Asia. A disruption in Middle Eastern feedstocks can constrain Asian chemical plants, which in turn limits output of resins, electronic components and subassemblies that eventually feed Western aftermarket supply chains. For example, celestite is mined in Iran, refined in China into strontium compounds, used in magnets and electronics, and ultimately embedded in vehicles assembled in the United States.

More Inflation Inevitable

Since late February 2026, prices across energy, petrochemicals, and critical materials have risen sharply. Roland Berger notes increases of 47% for crude oil, 68% for LNG, and up to 90% for naphtha, a key feedstock for plastics. Polyolefins, methanol, ammonia, and urea have all seen double-digit price increases, with further upside risk.

A critical insight for planning is timing. Historical correlations show a one- to three-month lag between sustained energy price increases and chemical price escalation. In practical terms, this means many aftermarket businesses have not yet seen the full cost impact flow through supplier pricing.

Downstream Effects of Higher Energy Costs

Logistics: The Second Shockwave

Beyond materials, logistics disruption represents a parallel and compounding risk. Maritime rerouting around Africa is adding 10-20 days to Asia-Europe transit times, while container shortages and port congestion are pushing freight rates up by an estimated 30-70% on key lanes. Air freight is also affected by Middle East airspace constraints, increasing flight times and compressing capacity.

For the aftermarket, where service levels, fill rates, and rapid replenishment are competitive differentiators, longer and less reliable transit times increase the need for inventory buffers precisely as working capital is under pressure.

Roland Berger’s sector exposure analysis places automotive among industries with moderate-to-high vulnerability based on significant indirect exposure to energy-linked inputs and limited pricing power in certain channels. This will lead to margin compression risk if cost increases cannot be passed through quickly.

Specific aftermarket impacts include:

• Higher resin and metal costs for molded and machined replacement parts
• Increased packaging and distribution expenses
• Greater risk of component shortages tied to Asian upstream disruptions
• Volatility in supplier claims tied to energy and logistics surcharges
  

Strategic and Operational Recommendations 

While the duration of the conflict remains uncertain, Roland Berger anticipates lasting effects:

• Logistics disruption for 6-12 months
• Infrastructure-related supply impacts potentially extending years
  

Aftermarket leaders should consider a mix of immediate actions and structural adjustments:

1. Strengthen Supply Chain Visibility and Scenario Planning: Map Tier 2 and Tier 3 exposure to energy-intensive materials, petrochemicals, and Asia-based processing. Scenario models should explicitly test prolonged disruption (90-180 days), not just short-term shocks.
2. Revisit Inventory and Service-Level Tradeoffs: Just-in-time assumptions deserve re-evaluation. Selective safety stock increases for high-risk SKUs may be justified where service failure would have outsized customer or revenue impact.
3. Activate Contractual and Commercial Levers: Review force majeure clauses, indexation mechanisms, and cost pass-through provisions. Where possible, align pricing cadence more closely with input cost movements to reduce lag-driven margin erosion.
4. Diversify Sourcing and Logistics Options: Nearshoring and dual sourcing will not solve near-term shortages but can materially reduce medium-term exposure. Similarly, pre-booking logistics capacity and securing alternative routes can mitigate volatility.
5. Integrate Geopolitics into Operating Rhythm: Energy prices, freight rates, and supplier financial health should be monitored as leading indicators, not exceptions. The conflict underscores that geopolitical risk is now a standing operating condition, not a tail event.

Opportunity for Stress Tests

The Iran conflict is a reminder that the automotive aftermarket is embedded in a deeply interconnected global system. Even companies far removed from the Middle East are exposed through materials, energy, and logistics dependencies. Aftermarket leaders can use the current events to stress-test supply chains, pricing models, and operating assumptions to emerge more resilient and better positioned for the next shock.