The conflict in the Gulf has focused renewed attention on the resilience of energy supplies and global trade routes. For the United Kingdom and its European partners, the region remains of central economic importance, not only as a source of hydrocarbons but as a critical crossroads in the movement of goods between Europe, Asia and beyond.
For businesses with exposure to the Gulf, the implications extend beyond short-term market movements. The issue is not simply one of price volatility, but of operational resilience in an environment where established assumptions about stability and security are increasingly open to question.
Much of the media commentary has focused on oil prices. That is understandable; but it understates the full extent of the conflict’s impact.
The Gulf is not simply an energy-producing region. It is the centre of a tightly integrated system in which hydrocarbons, shipping, desalinated water and industrial activity are closely interconnected. Disruption in one part of that system can rapidly propagate across others. For businesses with exposure to the region, the question is therefore not limited to the price of oil or gas, but extends to the resilience of the infrastructure on which their supply depends.
Energy production remains the most visible element of that system. The region accounts for a significant proportion of global oil supply, while Qatar is one of the world’s leading exporters of liquefied natural gas. Facilities such as Ras Laffan are not only central to global energy markets but are also highly concentrated and exposed assets. Their vulnerability, whether to direct attack or indirect disruption, is therefore of considerable significance.
Less frequently considered, but no less important, is the region’s dependence on desalination. Across much of the Gulf, potable water is produced through energy-intensive desalination plants located on or near the coast. These facilities rely on uninterrupted power supply and secure maritime conditions. Any disruption to energy infrastructure or coastal operations would therefore have immediate implications, not only for industry, but for basic services and population stability.
These structural vulnerabilities are most clearly exposed at the maritime chokepoints through which the system operates.
The Strait of Hormuz carries a substantial proportion of the world’s traded oil and liquefied natural gas. Further west, the Bab el-Mandeb forms the gateway between the Red Sea and the Gulf of Aden and is essential to the flow of goods through the Suez Canal. Both routes are narrow, heavily trafficked, and inherently vulnerable to disruption.
Recent remarks by President Donald Trump, suggesting that European nations should assume greater responsibility for maintaining freedom of navigation in the Strait of Hormuz, point to a broader shift in the strategic environment. For many years, the security of these routes has been treated as a given. That assumption can no longer be relied upon without qualification.
For businesses with interests in the Gulf, this has direct and practical implications. The issue is not confined to price volatility in energy markets, significant though that may be. It extends to the continuity of physical supply and the reliability of shipping routes on which both energy and wider global trade depend. Disruption in the Strait of Hormuz has been shown to have immediate and adverse consequences for oil and gas flows. Disruption in the Bab el-Mandeb, now threatened by Iran’s Houthi proxies, would affect not only energy shipments but also containerised trade moving between Europe and Asia.
In this context, the key question is not simply whether disruption will occur, but whether it can be mitigated or absorbed. Businesses should assume that periods of logistical instability may become more frequent, and that the uninterrupted flow of goods and energy cannot be taken for granted in the way it has in the past.
That has implications for planning and risk management. Companies with exposure to the region should consider the extent to which their operations depend, directly or indirectly, on these routes, and whether appropriate contingency arrangements are in place. For some, that may involve diversification of supply chains or inventory strategies. For others, it may require closer engagement with governments and regulators on resilience planning.
For the United Kingdom in particular, the issue is particularly acute. UK businesses are deeply engaged across the Gulf, and there are extensive commercial and human links between the regions. The consequences of disruption would therefore be felt not only in energy markets, but across a wide range of sectors, including manufacturing, agriculture, logistics and financial services.
The immediate focus of markets may remain on oil prices. However, the more significant issue is whether the systems that underpin those markets can continue to function as expected. That is the question to which businesses, as well as policymakers, must now turn their attention.