Published on: March 13, 2026 at 8:14 pm
Crises that affect global oil supplies like the war in Iran eventually mean consumer goods get more expensive, due to higher fuel prices increasing transportation costs.
But this familiar story misses a deeper dynamic, according to Academy of Management Scholar Matteo Cristofaro of the University of Rome Tor Vergata. Energy shocks do not simply make supply chains more expensive; they change how companies design them.
“Research on geopolitical risk and global trade increasingly shows that conflicts affect supply chains through multiple channels: higher transport costs, longer shipping routes, and greater uncertainty in energy markets,” Cristofaro said.
“Because modern supply networks rely heavily on maritime transport—and because fuel accounts for a large share of shipping costs—oil price volatility quickly translates into disruptions across global logistics,” he said. “What matters is not only the price of oil itself, but also the strategic uncertainty it creates.
“When energy markets become unstable, companies begin to reconsider how far their supply chains should stretch and how dependent they should be on a small number of suppliers or transport routes.”
Many companies have already started adjusting.
“Apple has expanded production in India and Vietnam, gradually reducing its reliance on China,” Cristofaro said.
“In the semiconductor sector, Intel and TSMC [Taiwan Semiconductor Manufacturing Company Limited] are investing heavily in new fabrication plants in the United States and Europe, reflecting a broader push to shorten critical technology supply chains,” he said.
“Meanwhile, logistics giant Maersk has invested in alternative fuels such as green methanol, partly to hedge against future fuel volatility.”
These decisions point to at least three structural shifts.
“First, firms are accelerating regionalization, locating production closer to major markets. Second, companies are increasing supplier diversification, spreading manufacturing across multiple countries to reduce geopolitical exposure,” Cristofaro said. “Third, executives are prioritizing resilience over pure efficiency; the lowest-cost supply chain may no longer be the most competitive one if geopolitical shocks can disrupt it overnight.
“For executives, the lesson is straightforward: Oil shocks should not be viewed simply as temporary cost increases,” he said. “They are signals that the geography of global production is changing.
“In that sense, rising oil prices do not just disrupt supply chains—they quietly redraw the map of globalization.”
