Energy Supply
Ernst van Biljon|Published
FOR supply chain professionals, the significance of the US-Iran Memorandum of Understanding extends far beyond the physical reopening of the Strait of Hormuz.
The Strait was only closed as a consequence of the recent conflict involving Iran, the US and Israel, meaning the agreement is fundamentally a de-escalation measure aimed at restoring stability to one of the world’s most important maritime chokepoints.
While markets have responded positively, supply chain leaders should avoid assuming an immediate return to normal.
Vessel traffic is only gradually resuming, insurers remain cautious and industry analysts expect weeks or even months before shipping flows, insurance premiums and freight rates fully normalise. Several hundred vessels were delayed during the crisis, creating a backlog that will take time to unwind.
The immediate impact is likely to be seen in energy markets — and indeed already has. As Iranian exports re-enter the market and shipping restrictions ease, oil prices have already started retreating from conflict-driven highs.
This could provide welcome relief for transport costs, manufacturing inputs, mining operations and agricultural supply chains globally.
For South Africa and the broader African continent, the implications are significant. Lower fuel prices would ease pressure on logistics costs, road freight, aviation, mining and food production. Import-dependent economies across East and Southern Africa stand to benefit from reduced energy and transportation costs, while inflationary pressures linked to fuel and fertilizer imports could moderate.
At the same time, African exporters may see improved shipping reliability and fewer disruptions to Asia-Europe trade lanes that indirectly affect vessel availability and freight rates into African ports.
However, the deeper strategic question is not whether supply chains should have better risk management. The more consequential question is whether this crisis will produce durable structural change, as Covid-19 did, or whether easing oil prices and normalising shipping will allow old habits to reassert themselves.
There are structural shifts this conflict is likely to accelerate rather than originate. The energy transition is the most significant. Just as Covid-19 forced e-commerce and digital transformation at a pace previously thought impossible, sustained oil price volatility and demonstrated fossil fuel supply chain fragility are creating genuine commercial urgency around alternative energy adoption.
Fleet electrification, green hydrogen and alternative shipping fuels are no longer purely sustainability conversations — they are supply chain resilience conversations. The Iran conflict has added hard commercial logic to what was previously driven largely by regulatory pressure.
Beyond energy, the crisis reinforces structural changes already underway since Covid-19: Shorter, more regionalised supply chains, dual sourcing as standard practice, and more deliberate monitoring of geopolitical chokepoint exposure.
With two major crisis events now behind them rather than one, businesses will find it considerably harder to justify optimising resilience away in favour of cost efficiency.
South Africa’s key constraint remains structural: port efficiency, berth productivity, rail connectivity and congestion management have limited South Africa’s ability to fully monetise rerouted global trade flows.
As a result, much of the “Cape of Good Hope rerouting dividend” was absorbed by global carriers adjusting schedules rather than translating into durable local logistics gains. In that sense, the opportunity was partially realised but not fully leveraged.
For African supply chains, the lesson is not only about geopolitical rerouting risk, but about readiness.
* Dr Ernst van Biljon is head lecturer of Supply Chain Management at IMM Graduate School.
** The views expressed here do not reflect those of the Sunday Independent, IOL, or Independent Media.
