Conflict in the Middle East jeopardizes supply chains

The recent Hamas terrorist attack on Israel has not only triggered a devastating conflict with hundreds of deaths, but has also had a serious impact on global supply chains. Everstream Analytics, a supply chain risk management company, reports that critical infrastructure in the conflict region has come to a near standstill.

More than 350 suppliers producing a wide range of goods for various industries are located in the conflict zone near the Gaza Strip. Companies such as 3M, Stanley Black & Decker, Bombardier and Daimler Truck are heavily dependent on these suppliers. Unfortunately, many roads to and from the sites are closed, which is likely to lead to plant closures.

International airlines such as American Airlines, Delta and Lufthansa have canceled flights to and from Tel Aviv's main airport. Road traffic in southern Israel is also disrupted due to checkpoints. While the port of Ashkelon is closed, important ports such as Haifa and Ashdod remain open.

Analysts at Everstream Analytics warn that companies in the US, Europe and elsewhere will continue to be affected by disruptions at their suppliers in the coming days and weeks. A labor shortage due to the call-up of reservists will affect production output in Israel.

The development of the oil price also plays an important role. The President of the Kiel Institute for the World Economy (IfW) emphasizes that the direct economic impact is low as long as the major oil producers in the region are not affected. However, there is a risk that the conflict could increase oil prices if the situation with Iran worsens.

Source: DVZ - Deutsche Verkehrs-Zeitung
Illustration by BING Image Generator KI