Second-order effects of Strait of Hormuz disruptions on the global economy in World Economy News 23/03/2026 Disruptions in the Strait of Hormuz are beginning to ripple far beyond energy markets, with second-order effects threatening global supply chains, trade flows and industrial output, according to Morgan Stanley. While the immediate impact has been a sharp rise in oil prices and tighter energy supplies, economists warn that the broader economic fallout could be more persistent and widespread. These secondary effects stem from the Middle East’s central role not just in oil, but in key industrial inputs tied to global manufacturing. The region is a major supplier of petrochemicals, fertilizers and metals like aluminum, all of which are deeply embedded in global production networks. As energy disruptions intensify, shortages and delays in these materials are emerging, raising costs across industries ranging from agriculture to construction and consumer goods. Morgan Stanley estimates that billions of dollars in trade flows are at risk, particularly in aluminum and plastics, which serve as upstream inputs for a wide array of manufactured products. Fertilizer supply chains are also vulnerable, especially for nitrogen-based products that rely heavily on natural gas, potentially affecting agricultural output globally. The impact is expected to be uneven across regions. Emerging markets such as India, Brazil and Turkey are among the most exposed due to their reliance on Middle Eastern imports for industrial inputs. At the same time, major developed economies including Japan and parts of Europe also face risks given their dependence on the region for key materials. These second-order effects could outlast the conflict itself. Even if oil flows normalize, restoring industrial production and supply chains may take significantly longer, as post-conflict efforts are likely to prioritize energy exports over downstream manufacturing capacity. As a result, the economic shock from the conflict may extend well beyond fuel prices, feeding into higher inflation, disrupted trade and slower global growth. Source: Investing.com 2026-03-23 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share