Luis Augusto Medeiros Rutledge, a researcher at the Federal University of Rio de Janeiro (UFRJ) and an energy geopolitics analyst, said the conflict in Iran could “forcibly reshape global supply chains.”

“I believe the impact today will be much greater on the global energy outlook and on supply chains for multiple energy sources,” he said. More than 20 million barrels of oil per day pass through the Strait of Hormuz, the waterway between Oman and Iran, he added.

Roberto Uebel, an economist and international relations professor at ESPM, a Brazilian business school, also said a halt in ship traffic through the strait could have a “very significant impact” on global supply chains, affecting Brazil. For him, maritime logistics disruption is the main issue triggered by the conflict.

Shipping lines

At least 150 oil tankers have already dropped anchor in open waters, avoiding entry into the strait. Maersk, the world’s largest container shipping company, said on Sunday (March 1) it had suspended the transit of its vessels through the area.

“The safety of our crews, vessels and customers’ cargo is our number one priority. We have suspended all vessel transit through the Strait of Hormuz until further notice,” the company noted in a statement. Hapag-Lloyd, CMA CGM, Mitsui OSK Lines and NYK Lines have also halted passage.

The disruption could also hit Brazil through another jump in global ocean freight prices, depending on how long the conflict lasts, said Leandro Barreto, a consultant at Solve Shipping.

He pointed to attacks by Yemen’s Houthi movement on cargo ships sailing near Oman in 2024. The campaign led companies to choose a longer route around South Africa.

At the same time, many shipments already en route to the Persian Gulf were forced to unload in Singapore, clogging one of the world’s main maritime hubs. At the height of the crisis, delays in Singapore reached seven days.

As a result, average global freight rates tripled in the first half of 2024. The same happened on the Asia-to-Brazil route, where prices tripled in the early second half of the year.

Alternative routes

On oil, Rutledge said alternative routes could help mitigate some of the effects of a disruption in Hormuz. He pointed to two pipelines that could serve as options.

One runs from the Abqaiq oil-processing facility, near the Persian Gulf, to the port of Yanbu on the Red Sea, operated by Saudi Aramco, Saudi Arabia’s state-controlled oil company. The other is run by the United Arab Emirates and bypasses the Strait of Hormuz, linking onshore oil fields to the export terminal of Fujairah, on the Gulf of Oman.

Even so, the trend for oil prices is upward. Rutledge said a disruption in flows through Hormuz could push crude to $120 in a longer and more intense war, “which would create significant pressure on the global economy and raise energy costs across all sectors.”

Roberto Ardenghy, president of the Brazilian Petroleum, Gas and Biofuels Institute (IBP), said the situation remains open-ended and he does not envision oil at $100 a barrel. IBP represents the main oil and gas companies operating in Brazil. On Friday, Brent crude closed up 2.45% at $72.48.

In Ardenghy’s view, if the conflict drags on, it could be an opportunity for Brazil to emerge as an alternative supplier to producers in the region. Brazil is the world’s ninth-largest oil exporter, he said, with “very reliable production” given the absence of geopolitical conflict, and high-quality pre-salt crude with low carbon emissions.

In trying to win new markets, however, Brazil would face competition from countries such as Nigeria, Guyana and Equatorial Guinea.

Risks to exports

The conflict’s impact on Brazilian exports to the Middle East is also a concern. “We mainly export sugar, chicken and soybeans. It’s an interesting market for Brazil,” Uebel said, while noting that Iran is not the main buyer of those products. “There is concern about the long-term situation, and whether these trade relationships will be maintained.”

Brazil imports mainly fertilizers from Iran, but Uebel said there are other sources of supply in Central Asia and Eastern Europe. “When the war in Ukraine began, the Brazilian government was concerned about diversifying its suppliers,” he said.