Shipping traffic through the Strait of Hormuz has slowed significantly following escalating tensions in the Middle East, raising concerns about potential disruptions to New Zealand’s supply chains and a likely increase in inflation. The key waterway, a narrow passage between Iran and Oman, carries approximately 20% of the world’s oil and a substantial amount of natural gas, but has seen shipping lanes impacted by the threat of attacks.
While New Zealand’s geographical isolation might seem to offer some protection, experts warn that the country is highly vulnerable to ripple effects stemming from disruptions in global trade. Auckland University professor Ismail Golgeci, specializing in international supply chains and the Gulf region, described the situation as a “smaller but more focused” version of the global supply chain crisis experienced during the COVID-19 pandemic.
“Of course, the biggest item is energy – petroleum and natural gas,” Golgeci told Q+A with Jack Tame. “What’s more important and perhaps overlooked is that it’s also a exceptionally important logistics location. The Port of Jebal Ali in the UAE is the ninth largest in the world. It’s the hub for trade in the region.” Although operations at the Port of Jebal Ali have reportedly resumed following a recent incident involving an Iranian projectile, the temporary suspension highlighted the fragility of the region’s logistical infrastructure.
The impact extends beyond energy costs. Golgeci emphasized the importance of the Strait of Hormuz for the flow of fertilizer, particularly urea, which is derived from natural gas. Disruptions to this supply could lead to higher global food prices, a concern given that fertilizer costs are “already hiking up.”
New Zealand’s export sector is also at risk. Significant quantities of New Zealand meat products are shipped to the Gulf region, and any disruption to shipping lanes could impede these exports. According to Stats NZ, New Zealand’s total annual exports reached $80.7 billion in the year ending December 2025, demonstrating the country’s reliance on international trade.
Business Desk senior correspondent Dileepa Fonseka noted the broader implications for commodity markets. “There are a lot of other things People can’t predict,” he said. “Sulfuric acid – sulfur – about 20% of the world’s supply comes out of the Strait of Hormuz. That’s important for copper, cobalt – you head further down that you’re hitting semiconductors.”
1News business correspondent Jason Walls suggested that the conflict in the Middle East is likely to contribute to rising inflation in New Zealand, potentially prompting the Reserve Bank to accelerate interest rate hikes. “We’re at a point where the Reserve Bank had thought we’d got things under control,” Walls stated. “That was before what’s happened in the Middle East, and she’ll be at this and probably thinking Here’s going to increase inflation, because as Dileepa noted, oil prices are embedded in everything.”
A 2023 report for the Treasury described New Zealand’s international supply chains as “thin and stretched,” warning they could become “more costly and exposed to increased disruptions – reducing the efficiency of the New Zealand economy.” The current situation in the Strait of Hormuz appears to be realizing those concerns.
