Hormuz crisis keeps supply chains under pressure even as reopening hopes riseLast updated: August 12, 2026 | 03:203 MIN READA man sits on a surfboard as a container ship and other commercial vessels appear anchored in the Strait of Hormuz off Bandar Abbas, in Iran.AP fileOil markets are sending a contradictory signal: Brent crude is back around $90 a barrel even as investors continue to price the possibility that the Strait of Hormuz could eventually reopen.The tension reflects a key problem facing the global economy: A diplomatic agreement could restore shipping through the world's most important energy chokepoint, but reopening the waterway would not instantly repair the supply chains damaged during months of disruption, according to a UBS report.Brent briefly touched $90 on Tuesday and was around $88.91 at 7.51am on Wednesday (Aug. 12), as hopes for a quick US-Iran agreement faded.Iran has said a deal with Oman is close but has stressed that an agreement alone would not necessarily reopen Hormuz. On Tuesday, Iranian Foreign Minister Abbas Araghchi met Pakistan’s Interior Minister Mohsin Naqvi in Tehran as Islamabad steps up mediation efforts aimed at ending the ongoing conflict between Iran and the United States. According to Iran’s official IRNA news agency, the two officials discussed key diplomatic and bilateral issues, but no further details were provided.Oil is rising despite hopes of reopeningNormally, the prospect of reopening Hormuz would be bearish for oil. While Brent had fallen below $80 earlier this month as investors anticipated an Iran-Oman arrangement, it subsequently climbed as the diplomatic picture became less certain.The latest move above $90 is less a bet that Hormuz will remain permanently closed than a warning that normalisation could take much longer than markets initially hoped.'Supply chain stress'UBS has revived its global supply-chain stress analysis during the Middle East conflict after having used a similar measure during the pandemic.Recent UBS research indicated that supply-chain stress jumped sharply in the early months of the conflict.It has reported a decline from the peak. However, it does not mean the supply chain is back to normal, but that the rate of deterioration has eased.Other measures tell a similar story: The New York Fed's Global Supply Chain Pressure Index, combines transportation and manufacturing data to assess global supply-chain conditions.UBS's Supply Chain Stress Index: The UBS Supply Chain Stress Index is designed to measure how severely global supply networks are being disrupted by events such as transportation bottlenecks, freight-cost increases and shortages or delays affecting the movement of goods. Hormuz disruptionThe Strait of Hormuz is not merely an oil pipeline at sea. The UN Conference on Trade and Development (UNCTAD) has warned that the disruption has consequences extending beyond energy markets into maritime transport and global supply chains.Shipping companies have also faced higher fuel and insurance costs and have rerouted vessels. Container freight rates have risen sharply during the crisis, while bunker fuel costs have increased significantly. That creates what economists sometimes call a "lagged supply shock".Even after the physical bottleneck disappears, companies still have to:reposition ships;clear backlogs;replenish depleted inventories;renegotiate freight contracts;restore insurance coverage;restart disrupted production;rebuild transportation schedules.So the economic impact can outlive the geopolitical event that caused it.InventoryThe biggest issue may be inventories. During a prolonged disruption, companies can survive by using stocks already in warehouses, storage tanks and strategic reserves.But once those inventories are drawn down, businesses need to replenish them. That creates a second wave of demand for shipping and commodities just as the transportation system is trying to normalise.Reopening does not equal instant normalisation.Oil is only part of the shockEnergy is the most visible component. Hormuz normally carries roughly one-fifth of global oil consumption and a major share of global LNG trade, making disruption there unusually consequential for energy markets. Reuters has cited the waterway's normal role in carrying roughly a fifth of global oil and LNG flows.But higher energy prices feed into virtually everything that moves, so why a temporary energy shock can become an inflation problem.What markets are watchingThe market is caught between diplomatic optimism and physical reality.Iran and Oman have moved toward an arrangement, but Tehran says the waterway will not simply reopen without further conditions. Meanwhile, Washington's position remains difficult to reconcile with Iran's demands.That uncertainty. But even a successful agreement would not immediately erase the damage already done.The Strait can reopen in a day. Global supply chains cannot.That is the significance of the UBS stress indicator: it captures the economic aftershock that oil prices alone can miss.If Hormuz traffic normalises, energy markets could recover relatively quickly. Freight, inventories, insurance and manufacturing may take considerably longer.Get Updates on Topics You ChooseUp Next