Good morning, good afternoon, or good evening, wherever you are in the world. Welcome to episode 116 of the Resilient Supply Chain podcast, and the second bonus episode of Resilient Supply Chain+, I'm your host, Tom Raftery. Before I get into today's topic, a quick reminder of what these bonus episodes are. I recently changed the podcast model a little bit. The back catalogue that subscribers used to have exclusive access to is now open to everyone. Instead, you, the subscribers now get these bonus episodes roughly every two weeks. And honestly, I think that's the better trade because these episodes are built for moments like this. Fast moving stories. High consequent developments, things that matter now to supply chain leaders, procurement teams, operators, policy makers, and anyone trying to make decisions while the ground is still moving. The value here is not timeless theory. It's timeless interpretation. That was the logic behind the first bonus episode, and it still holds. Last time I talked about the illegal, ill-advised and unnecessary war in Iran and what it meant for global supply chains. That episode was about the initial shock. This one is about what comes next, and just as importantly, what not to assume next because one of the easiest mistakes to make in moments like this is to just drift into false certainty. Some people see a ceasefire and decide the crisis is basically over. Others see a shipping bottleneck and start talking as if every supply chain on Earth is now in permanent breakdown. Neither of those is serious analysis. So let me be clear from the outset. This is not a prediction that every sector will worsen steadily over the next six to 12 months. It's a risk-based assessment that the war on Iran has created a period of elevated volatility, patchy physical disruption, and persistent cost pressure that many businesses would be foolish to treat as a short-lived blip. The ceasefire has not restored normality. It has simply changed the shape of the disruption. Shipping through the strait of Hormuz remains badly impaired. That matters, but it's also important to be precise. This is not a total cessation of commerce, and that distinction matters too. A fully closed choke point is dramatic, but at least it's unambiguous. A partially open choke point is harder. Conditional access, tolls, unclear sanction exposure, unstable insurance cover, that creates something more difficult for business leaders than simple disruption. It creates uncertain disruption and that's harder to plan around, harder to price, and much harder to explain in a quarterly forecast. Even if the ceasefire holds the after effects don't vanish. Networks don't just snap back. Vessels have already been rerouted. Cargoes have already been delayed. Insurers have already repriced risk, buyers have already started scrambling for alternatives. So the core idea for this episode is simple. Over the next six to 12 months, the issue is less likely to be universal collapse. It's more likely to be selective stress. Some sectors will be hit directly, others indirectly, some mainly through margins, some mainly through inflation, some barely at all. So let's separate them. First there are sectors facing acute operational exposure, Oil and gas flows, tanker traffic, some air freight, fertiliser linked agriculture, and industries that rely on specific petrochemical or sulphur derived inputs. These are the sectors where disruption is most immediate and most physical. Then there are sectors facing mainly cost and margin exposure. That includes trucking, packaging, food manufacturing, distribution, and large parts of industrial production. The system may still be functioning, but it's functioning at a higher cost. And when cost pressure persists, weaker firms feel it first, smaller carriers, thinner margin suppliers, firms with poor contracts, firms with limited cash buffers. Firms still telling themselves this will all blow over. Third. There are sectors facing mostly second order inflation exposure. These businesses may not import oil, fertiliser, or Gulf shipped imports directly, but they still face more expensive transport, more expensive packaging, more expensive food inputs, nervous customers, and tighter working capital. That's how geopolitical shock spreads. Not every business gets hit at once, and not every business gets hit equally, but over time, the pressure travels. You can already see that in food and agriculture. This is still, in my view, one of the most underappreciated parts of the war on Iran. Oil gets the headlines because it's noisy. Fertiliser and sulphur get less attention because they're duller. But duller does not mean less important. Disruption to fertiliser now becomes a planting problem next, then a yield problem later, then a food inflation problem after that. And the timing matters. Agricultural calendars do not care about diplomatic ambiguity. Now, to be fair, that does not mean every food supply chain is about to seize up. Again, exposure is uneven. It's also lagged countries and firms with more inventory, stronger balance sheets, more diversified sourcing or lower fertiliser intensity will fare better, others will not, and that regional difference matters. Europe and North America are likely to feel this through higher energy and food costs and through industrial pass through. Asia has a sharper direct oil exposure in many cases, latam faces input and freight volatility, especially where agriculture is a major export engine. And for parts of Africa, food and fertiliser disruption can become a humanitarian issue alarmingly quickly. The same need for nuance supplies to freight. Not every freight market is in meltdown. Some ocean lanes remain manageable. This is not pandemic scale breakdown, but manageable does not mean fine. It means the system is still operating, but with more friction, more surcharges, more rerouting, and less room for error. And many firms are still underestimating where that pressure will show up first. Lamb Weston is a useful example here. This is a frozen food business, not an oil major, not a shipping lane, not an airline, and yet it is already warning about potential headwinds tied to fuel packaging, regional volumes, and broader volatility if the effects of the war persist. That is the point. Geopolitical shocks rarely stay in their original lane. Now a fair critic could say markets adapt, and that's true to an extent. Governments release reserves, carriers reroute, shippers push back on opportunistic surcharges, firms look for substitutions, alternative ports get used, land bridges get used. Businesses are not passive. But adaptation is not the same thing as a free reset. Rerouting adds time and cost, reserve releases buy time they do not remove dependency, supplier substitution often shifts risk rather than eliminating it. And every workaround consumes management attention, working capital, and operating margin. That's why this still matters for the next six to 12 months. Not because every chart points straight down, but because the system is now carrying more friction, more uncertainty, and less room for error. Now, let's talk about electrification because this is another area where it's easy to get sloppy. Electric vehicles and renewables do not solve everything. They do not fix fertiliser shortages. They do not replace jet fuel overnight. They do not decarbonize every hard to abate industrial process by next Tuesday, and they do not magically solve grid bottlenecks or infrastructure gaps, but it would be equally unserious to ignore what this war is revealing. It's revealing that fossil dependence remains a strategic liability and in some areas the market is already responding. Recent reporting shows that the war on Iran and the resulting oil price shock are driving increased electric vehicle interest, and in some markets increased sales. In the US used EV sales in the first quarter of 2026 were up year on year and, quarter on quarter. In the UK EV leasing inquiries rose sharply and in Germany EV search activity and the dealer inquiries jumped. Similar patterns are showing up in parts of Asia and Oceana. That doesn't prove a universal global EV surge. What it does show is something simpler. When fuel prices spike electrified transport starts looking less like an ethical preference and more like a hedge. A practical hedge, an operational hedge, a cost hedge, and that matters. Not because EVs replace every fuel dependent activity, but because every kilometre electrified is one less kilometre exposed to imported oil shocks. The same logic applies to local renewables, to storage, to electrified site operations, to long-term power procurement. These are not total solutions. They are partial, but meaningful reductions in exposure. Interestingly, one of the strangest truths in crises like this is that fossil fuel shocks often become unpaid advertising for electrification, war risk premiums, tanker cues, and diesel spikes make surprisingly effective sales pitches for technologies that run on domestic electricity instead. So what should leaders actually do? Not the vague LinkedIn version, the real version. First in the next seven days, identify your top 20 suppliers by spend or criticality, and ask four questions. What is their primary energy exposure? What logistics corridors do they rely on? What surcharge clauses can they trigger, and what inventory cover do they have today? Second, in the next 30 days, review every major customer and supplier contract with a focus on fuel surcharge mechanisms, price adjustment frequency, emergency or war risk surcharges, service level penalties, force majeure language and payment timing and receivables risk. Third segment inventory into three buckets, items with direct Gulf or fuel linked exposure, items with likely second order cost exposure and items with low strategic risk. Buffer the first bucket selectively. Monitor the second. Leave the third alone. No hoarding, no drama. Just disciplined asymmetry. Fourth, update your regional assumptions. Europe should be planning for persistent energy cost sensitivity, and industrial pass through. North America should be planning for diesel and trucking stress. Asia should be planning for the sharpest direct oil exposure. LATAM and Africa should be watching food, fertiliser, and imported energy knock-on effects closely because these can very quickly become cost of living and political problems as much as supply problems. Fifth, identify where electrification already makes financial sense, not as a grand transition manifesto, but as a procurement and resilience decision. Fleet segments with predictable routes. Depots with higher power demand, warehouses with refrigeration loads, sites with expensive diesel backup, operations where solar plus storage or a stronger power contract can reduce exposure quickly. Sixth set a weekly cross-functional review for the next eight weeks across procurement, logistics, finance, operations, and energy. Not monthly, weekly. This is a live risk and monthly cadence is what organisations choose when they want the comfort of process instead of the discomfort of action. So the deeper lesson of the war on Iran is not that every supply chain is now broken. It's that many were more exposed than they realised, and many are still measuring risk too narrowly. Energy security and supply chain resilience are not separate conversations. They are the same conversation. That was true in the first bonus episode, and the evidence since then has only reinforced it. The firms that manage the next six to 12 months best will not be the ones making the loudest geopolitical predictions. They will be the ones that map exposure honestly, segment risk properly, act before contracts force them to, and reduce dependence where they can. And governments face the same choice. They can spend public money trying to recreate the old fossil fuel normal. Or they can use this as a line in the sand to accelerate electrification, renewables, storage, grid investment, and more regionally resilient industrial systems. If you found this episode useful, please share it with a colleague, friend, family, anyone you think might find it interesting. And if you have thoughts, push back or examples from your own organisation, I'd love to hear them. You can click the send me a message link in the show notes, or email me at tom@tomraftery.com or hit me up on LinkedIn. Now, thank you for listening, and until the next time, stay resilient.