10th Iran War. The New Pandemic of Global Trade

The New Pandemic of Global Trade

Iran 10th day of the WarIn terms of the global economy, it marks a time when new risks are becoming more apparent. Following military activity, which began on the night of February 28, uncertainty over energy prices, supply of raw materials, freight costs and global trade routes is deepening.

10th Iran War. Oil Prices on the Day

Iran WarIn addition to energy costs, it also increases raw materials supply risks in global production networks. With the start of the war, the energy markets became the most fiercely responsive front. Brent oil prices on the tenth day $115 and has reached almost 2 times its price since the beginning of the year. The Strait of Hormuz effectively approaching closure, together with insurers cancelling policies for ships in the region, directly undermined security of supply.

This constraint in energy supply not only raises prices, but shakes industrial production from its foundation. In particular, factories operating in energy-intensive sectors began to lower their production capacity due to increased costs and possible energy cuts. This is considered to be the leading tremors of a global supply shock.

Iran War and Raw Material Supply Crisis

One of the biggest threats to global production networks Raw Material It stands out as a blockage in its supply. The shipment of petrochemical products from the region, fertilizer components, and some rare elements vital to technology production came to a halt.

• Raw Material Access: Manufacturers seek alternative funding, but logistical barriers make this transition difficult.
• Cost Edition: Increasing energy prices are pushing up raw materials processing costs, creating an inflationary pressure on final product prices.

Astronomical Increase in Freight Prices

The cost of the "navlun" in shipping was almost out of control within ten days. On routes linked to the Middle East and India, freight prices are observed to increase between 3 and 5 times.

For safety reasons, giant container ships that opt to navigate Cape Ümit instead of the Suez Canal both extend delivery times by two weeks and double fuel costs. This logistical gridlock causes equipment imbalance in ports, while causing exporters to face order cancellations.

The Effects of the Iranian War on Tourism

The effects of the Iran War on Turkish tourismIt is closely followed, especially in terms of tourist mobility from Iran and Gulf countries. The shadow of the war fell not only on the factories but also on the resorts. The perception of a "safe zone" in global tourism is changing rapidly.

• Turkish Tourism: Due to geographical proximity, Turkey was faced with a massive wave of cancellations, especially for Nevruz and the upcoming holiday period. Expected tourist flow from Iran and Gulf countries decreased by 80 percent in ten days. Tourism activities have come to a standstill in our eastern provinces, while sector representatives describe this process as the most severe crisis in recent years.
• World Tourism: Tourism throughout the Middle East has suffered serious damage. Tourists have begun to prefer routes further away to the conflict zone, such as Europe or South America, rather than Dubai and surrounding destinations. The increase in accommodation and transportation costs is another element that suppresses travel appetites around the world.

General Assessment

The effects of the Iranian War on global tradeIn many sectors, including energy, logistics, production and tourism, new risks are emerging. This painting, which we face on the tenth day of the war, reminds us of the early days of that great global pandemic in 2020. At the time, borders were closed due to a biological virus, and today a geopolitical crisis has paralysed the lifebloods of global trade.

• Pandemic Silence in Production: In the pandemic, we witnessed factories closing and shelves empty. At the moment, the constraints in energy supply and critical Raw Material Cutting off the flow triggers a similar production crisis. Production bands began to take on the silence that "we are waiting for parts and energy" just as they did during quarantine days.
• Price Shock and Inflation: The fact that oil has already exceeded the $90 threshold and that freight prices are out of control puts a much faster and harder version of that famous wave of inflation after the pandemic in front of us. In 2020, rising costs due to logistical blockages are directly targeting the consumer's pocket, combined with the high risk premium created by the war today.
• Travel and Confidence Perception: Just like that deep state of uncertainty in the pandemic, markets today cannot predict what the next move will be. The sudden course changes in tourism and the search for safe harbors remind us of those old days of "restriction" only this time with a much more dangerous scenario.

In short, while the world economy has just wrapped up the wounds of the pandemic, it is now entering a much more complex process of "economic isolation". If the diplomatic channels don't activate as soon as possible, those supply crises we're familiar with from the pandemic era could become much more permanent and devastating this time around.