Middle East crisis to potentially cause container shortages and slow down transport in coming weeks

The current assessment of the National Emergency Supply Agency (NESA) is that the conflict between Israel, the United States and Iran does not affect Finland’s security of supply for the time being. The most significant impact may arise indirectly from increased energy prices and disruption to maritime transport.

The National Emergency Supply Agency assesses the various developments in the Middle East from the perspective of sectors critical to security of supply. As the war continues, delays in global supply chains will increase and European ports may also become congested.

The availability of shipping containers in Finland is likely to decrease within the next few weeks. Currently, there are 138 container ships trapped in the Arabian Gulf. According to some estimates, there are 200,000 containers in the Arabian Gulf that are prevented from entering the natural cycle. All major container shipping companies have declared that they will not operate through the Suez Canal in the present situation. Travelling around Africa increases travel time and the amount of fuel needed.

Finland is not dependent on Middle Eastern oil

The closure of the Strait of Hormuz is causing a major energy supply disruption on a global scale, as around 20% of the world’s oil passes through the strait. Finland’s direct dependence on energy transported via Middle Eastern shipping routes is low. In Finland, there are no problems with oil availability, as the operators selling oil use North Sea crude oil.

So far, the increase in oil prices has not led to a need to release emergency stocks of oil products in Europe.  If the situation persists, the International Energy Agency (IEA) may order the release of emergency stocks worldwide. In Finland, this would mean that the National Emergency Supply Agency or companies obliged to maintain compulsory stockpiles would release oil into the market. The last time this happened was in spring 2022, after Russia invaded Ukraine.

Airfreight disruptions caused by the war can lead to delivery delays and cost increases in the pharmaceutical and other industries.

The availability of fertilisers may decrease in primary production

Iranian gas and urea are used in fertiliser production. World market prices for urea, ammonia and fertilisers have increased. Finnish industry has already largely procured the raw materials needed for the coming summer, and farms have ready-made fertilisers in stock. Over the long term, rising prices may affect global food security, particularly in the Southern Hemisphere.

It is estimated that around a quarter of the world’s plastics, such as polypropylene, originates from the Middle East. There may be a significant disruption to the supply of plastics if oil refineries in the region are attacked and the crisis is prolonged.

There have been attacks against data centres in the Middle East, but the resulting disruptions have been regional. Disruptions to data centres and telecommunications cables in the conflict-affected area may result in a slight slowdown of telecommunications connections in Finland.

The National Emergency Supply Agency is monitoring the situation and will update its assessment as necessary.