Tariff Shock
Nearly a fifth of world merchandise imports are now affected by tariffs. Global trade is now dictated by a series of live negotiations.
The Iran Conflict
The closure of the Strait of Hormuz has sent shockwaves through energy, food and AI infrastructure supply chains.
Supply Chains Rebuilt for Disruption
The shift from efficiency to resilience is now an operational necessity.
From Rules to Relationships
Bilateral deals, regional blocs and strategic partnerships are filling the vacuum left by weakened multilateral institutions.
“The world remains interconnected and globalised… but the nature of this globalisation is changing constantly.”
Chief Asia Geopolitical Strategist, Deutsche Bank
“Geopolitical tensions will be the main driver of change in global trade well beyond the next two years, with U.S.-China tensions at the core of the risk.”
Founder and CEO, APAC Advisors
The Strait of Hormuz: The World’s Energy Chokepoint
The closure of the Strait of Hormuz is one of the most disruptive events in global energy markets in recent history. Before 2026, ~25% of global seaborne oil and 19% of global LNG transited the strait daily. By mid-April 2026, tanker transits were running approximately 90% below pre-war levels.
The energy shock has been immediate and severe. Brent crude surged above $120 per barrel, double the $60 level at the start of 2026.
Brent crude oil prices have spiked since March 2026
U.S. imports from alternative partners to China have escalated: up 72% from Mexico, 94% from India, and 345% from Vietnam
Source: UN Comtrade, 2026
From “China + 1” to “China + many”
Global supply chain strategies have shifted from "China + 1" to "China + many". U.S. imports from China contracted 5% overall between 2014 and 2024.
Beyond Energy: Food Security
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The conflict's reach extends well beyond oil markets
The conflict's reach extends well beyond oil markets. The Strait of Hormuz carries around a third of seaborne fertiliser trade. The FAO projects global fertiliser prices could rise 15-20% in the first half of 2026 if the conflict persists, with urea export prices in the Middle East already rising by 40%.
The Hormuz fertiliser shock
Source: Angel and Veyet, 2026, FAO, 2026
% change in price
Beyond Energy: AI Infrastructure
The connection to digital infrastructure is less visible but equally significant. Taiwan sources around 30% of its LNG through the strait; TSMC, which consumes nearly 10% of Taiwan's electricity, faces direct upstream exposure as a result.
Per cent of global imports occurring between partners in regional trade compacts surged
Source: WTO, 2025a
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