Iran war continues to impact automotive supply chain: Strait of Hormuz access and energy price volatility remain key concerns

The conflict in the Middle East is affecting automotive supply chains both directly and indirectly. The de facto closure of the Strait of Hormuz has meant that shipments have been delayed and shipping routes have been disrupted. As well as limiting movement of vehicle components and finished vehicles through significant channels in the Gulf region and Middle East, the disruption has also caused volatility in the price of oil and natural gas – as well as other resources that are crucial for the automotive supply chain such as coatings, plastics, battery materials and semiconductors.

Although no major OEMs have yet publicly reported production stoppages or any such operational impact as a result of the war, they will certainly be looking towards their suppliers to assess risk, and towards their logistics partners to ensure the threat to both inbound and finished vehicle logistics is kept to a minimum.

Cargo in limbo and access to a key market restricted

With the safety of seafarers top priority for shipping companies, passage through the Strait of Hormuz has not been a viable option for most vessels since the war broke out. According to data analysed by BBC Verify, just under 100 ships passed through the Strait of Hormuz from the outbreak of the war to March 20 – a 95% reduction in traffic from the 130-ship daily average recorded prior to the crisis.

Read more: Turning supply chain disruption into competitive advantage at GM, Schaeffler, and Toyota

At ALSC Europe 2026 in Bonn, leaders from General Motors, Schaeffler, Maersk, Toyota Motor Europe and Kinaxis discussed how companies pulling ahead are the ones that have restructured how logistics fits into the enterprise before the crisis arrives.

"Our customers with cargo to and from the Gulf are in a very difficult situation," Karsten Kildahl, chief commercial officer at Maersk acknowledged. "Together, we are trying to find the best possible solution under these circumstances. This may involve having containers temporarily stored, having them returned, or identifying a new port to which they can be shipped. From there, we are working, where possible, to find alternative transport, so that customers can get their cargo to where they need it. Our focus is on stability and delivering workable solutions in an unpredictable environment."

As well as being home to key shipping routes, the Gulf region also represents a significant market for the automotive industry – especially when it comes to premium autos. For European premium manufacturers, the concern centres on the Middle East's role as a high-margin growth market at precisely the moment when China and the US face structural headwinds. Volkswagen Group chief executive Oliver Blume stated in mid-March that the conflict could weaken premium auto demand in the region, with particular concern around Porsche and Audi. Porsche noted it was "continuously assessing the current situation and possible influences on the company," acknowledging that "the current situation in the Middle East could have a negative impact on supply chains and demand in the future."

Metzler Research analyst Pal Skirta identified the stakes with now-nail-biting clarity: "The Middle East has recently become one of the highest-margin structural growth regions for premium automakers." Porsche made 28% more revenue per car sold in the region in 2025 than in 2020. The conflict introduces two distinct threats: short-term disruption of sales activity, and medium-term demand compression through wealth effects if the energy shock drives regional asset prices lower.

On the Red Sofa at Automotive Logistics and Supply Chain Europe 2026, Martin Corner, executive director of supply chain management and logistics at Aston Martin, alluded to the fact that customers in the Gulf region were the first concern for Aston Martin's supply chain, and the team immediately looked into how customers might have been affected by military action or cash flows drying up. "We really went customer first, supply base second," Corner explained.

Also at ALSC Europe, Tatiana Hristov, director of EMEA light vehicle sales forecast at S&P Global Mobility, shared how the Iran war is stalling vehicle sales in the Middle East and impacting adjacent countries. "The Middle East is suffering from the escalation of the crisis," she said. "But at the same time, the Middle East is one of the regions [expected] to grow in the future."

According to S&P forecasts, in spite of the conflict, the Middle East shows more promising volume growth potential than other markets, such as Central Europe.

Fluctuating energy prices

In the week following joint strikes by the US and Israel on Iran, Brent crude oil prices soared, reaching a high of $116 per barrel on March 9. Prices then dropped, and steadily rose again, followed by a sharp drop on March 23 – when US president Donald Trump signalled a resolution could be in sight (although Iran's foreign ministry issued a statement denying negotiations between the US and Iran took place).

Natural gas prices followed a similar trend, peaking on March 9, followed by a period of instability before a gradual rise in the days leading up to March 23 – which saw a sharp decline. The biggest flashpoint of the conflict from the perspective of natural gas supply came on March 19, when Iranian attacks caused extensive damage to two of Qatar's 14 LNG trains and one of its two gas-to-liquids (GTL) facilities.

QatarEnergy's CEO and state minister for energy affairs, Saad Sherida Al-Kaabi, said that the attacks have hit 17% of Qatar's LNG export capacity, threatening supply to Europe and Asia while resulting in an estimated $20 billion loss of annual revenue.

He told Reuters that QatarEnergy will have to declare force majeure on LNG contracts for a period of up to five years because of the damaged trains. LNG supplies bound for Italy, Belgium, South Korea and China were affected by the attack.

The transport sector still relies heavily on fossil fuels – with oil products accounting for around 90% of the industry's final energy, according to data from the International Energy Agency (IEA) – so higher oil and LNG costs could seriously impact the bottom lines of firms in the automotive supply chain.

“The war in the Middle East is creating a major energy crisis, including the largest supply disruption in the history of the global oil market," said IEA Executive Director Fatih Birol. "In the absence of a swift resolution, the impacts on energy markets and economies are set to become more and more severe."

The IEA has published a report outlining a range of demand-side actions that governments, businesses and households can take to alleviate the economic impacts on consumers of the disruptions to oil markets stemming from the war in the Middle East, including such suggestions as: work from home where possible; avoid air travel where alternative options exist; and encourage public transport.

Watch: JLR’s Levent Yuksel on driving sustainable logistics together

At ALSC Europe 2026, Jaguar Land Rover’s freight operations director shared how industry-wide collaboration, green corridors and innovative network strategies are key to achieving sustainable automotive logistics.

But for global shippers, different action is needed – as outlined by Maersk's Kildahl. "There is currently sufficient fuel globally, but it is unevenly distributed," he explained "As a result, we are making changes to our fuel supply chain and begin moving fuel to ensure our vessels can continue to bunker where needed – and protect the flow of trade. Through the redistribution of fuel and additional initiatives to optimise our fuel supply chain, we are securing the longer-term stability of our global ocean network operations."

So with this conflict exposing the industry's vulnerability to fluctuations in oil prices, one may ask: could the conflict in the Middle East accelerate a move away from diesel? In this regard, exploring alternatives to fossil fuels would not merely be an exercise in improving sustainability, but a strategic move offering supporting long-term resiliency.

This is something Levent Yuksel, freight operations director at JLR, discussed at ALSC Europe 2026. "There's a crisis in the Middle East, but if that crisis is pumping up the cost of the diesel then maybe it's an opportunity for us to think differently and accelerate our actions about alternative solutions," he said.

Aluminium supply crisis

Of all the material vulnerabilities now in play, the one with the most direct and most underappreciated implications for vehicle production is the emerging crisis in primary aluminium supply. A typical mid-size passenger vehicle contains upwards of 200kg of aluminium across its body structure, closures, suspension components, powertrain casting and thermal management systems. Every stamping plant, every die-casting cell and every body assembly line in global vehicle manufacturing is therefore tethered, at varying degrees of remove, to the state of primary aluminium supply.

That supply is now fractured. Gulf Cooperation Council (GCC) nations collectively account for approximately 9% of global primary aluminium production. Exclude China – the dominant producer, but one from which Western and Japanese manufacturers cannot source meaningfully at short notice – and that share rises above 20%.

Read more: Novelis expects to restart hot mill in summer 2026 after fires last year

Aluminium supplier Novelis has said it expects its hot mill in Oswego, New York to restart late in the second quarter of 2026, after several fires broke out in late 2025.

Remove Russian aluminium, still largely inaccessible to Western buyers, and the Gulf's strategic significance to manufacturers in Europe, North America and Japan becomes acute. For American producers alone, roughly 20% of aluminium imports originate in the Gulf.

The disruption has now arrived in concrete form. Aluminium Bahrain, known as Alba, which operates the world's largest single-site aluminium smelter with annual capacity of 1.6 million tonnes, has declared force majeure on deliveries and cut output by 19%, citing its inability to load shipments through the Strait of Hormuz, effectively closed since early March.

Qatalum, the Qatar-based joint venture between Norsk Hydro and Qatar Aluminium Manufacturing, announced a controlled production shutdown precipitated by natural gas shortages following the Iranian strikes on Qatari energy infrastructure. Together, these two operations account for approximately 570,000 tonnes of annual production capacity, now halted or severely curtailed.

The impact is already showing up in metals markets and is starting to affect car production. Prices for aluminium — a key material used in vehicles – jumped by about 8% in just the first two weeks of the conflict, reaching close to a four-year high of around $3,370 per tonne.

There’s also a more subtle but important warning sign: normally, aluminium for future delivery costs more than buying it today. But that pattern has flipped. Right now, immediate supply is more expensive than future supply – a signal that buyers are scrambling to get hold of aluminium in the short term and that shortages are starting to bite.

Semiconductor production at risk

An often-overlooked resource in times of crisis like these are specialty gases essential for the manufacturing of semiconductor manufacturing, namely neon, helium, argon, krypton and xenon. As a report from Supply Chain Intelligence Institute Austria found,  annual trade of these gases from Gulf states totals approximately $3 billion, with Qatar representing around 98% of Gulf specialty gas exports.

Read more: Dutch Enterprise Chamber orders investigation into Nexperia and Wingtech dispute

The Enterprise Chamber in Amsterdam has ordered an investigation into Nexperia as the dispute between its Dutch headquarters and Chinese parent Wingtech continues.

Qatar produces around a third of the world's helium, a gas with no practical substitute in semiconductor fabrication, where it is essential for cooling and purging in chip manufacturing processes. By early March, spot prices for helium had increased by around 40% in a single week following the disruption to Qatari production. Initial assessments suggested the conflict could affect as much as a third of total global helium supply.

The automotive industry's encounter with semiconductor scarcity between 2021 and 2023 produced hard-won institutional knowledge of what chip shortages do to assembly plant throughput. A sustained disruption to helium supply introduces a meaningful probability of rising semiconductor manufacturing costs at precisely the moment when automotive chip demand is expected to accelerate, driven by the proliferation of electronic control units, driver assistance systems and battery management hardware in new-generation vehicles.

BASF chemical products price hikes

Another commodity which has already seen prices increase is chemicals and coatings. BASF, a major chemical supplier to the automotive sector, announced an increase in prices for neopentyl glycol in Europe. This chemical is a high-quality intermediate used for automotive coatings and industrial resins.

As it announced up to 30% price increases on all products in its Home Care, Industrial & Institutional Cleaning (I&I) and Industrial Formulators portfolio in Europe, BASF said: "The move primarily comes in response to significant volatility in the pricing and availability of key raw materials, increasing domestic and transcontinental logistics costs, and soaring packaging and energy costs."

This example shows the severe knock-on effect that the de facto closure of the Strait of Hormuz and damage to energy infrastructure in the Gulf region could have if the conflict continues to disrupt trade for an extended period of time.