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Saudi Arabia\u2019s East-West pipeline was closed this week after serving as one of the largest buffers against this year\u2019s historic Strait of Hormuz energy shock. Together with the UAE\u2019s bypass pipeline, the two routes carried approximately 5 million additional barrels a day around the Strait in the second quarter, compared to their fourth quarter 2025 volumes, according to our latest research.<\/p>\n
Its temporary shutdown puts a fresh spotlight on the broader set of shock absorbers that have helped the global energy system adapt. No single measure has absorbed a disruption that put roughly one-fifth of global oil supplies at risk. Instead, layers of resilience built over decades kicked in together.\u00a0<\/p>\n
Alongside pipelines, governments and companies also drew on inventories, while producers\u2014including the United States\u2014increased exports. Overall oil consumption did fall, but flexibility helped manage some of the economic impact. Refiners changed crude inputs and their production mix, industrial companies switched feedstocks, and consumers changed behavior. More than one in five barrels of seaborne oil traded in the second quarter of 2026 moved differently than before the disruption.\u00a0<\/p>\n
Taken together, the experience brings several features of resilience into focus. It is layered: different measures work alongside and compensate for one another. It is dynamic: options available early in a disruption may become constrained or themselves disrupted, increasing the value of both alternatives and the ability to adapt. And its economics evolve under stress: spare capacity or alternative routes that appear underutilized in normal times can become vital when continuity is threatened.<\/p>\n
For companies, these lessons matter well beyond Hormuz. In our\u00a0new report,\u00a0we find two-thirds of energy trade passes through maritime chokepoints, one-third occurs between partners who are not geopolitically aligned, and 95% of people live in regions importing at least one major fuel.\u00a0<\/p>\n
The implications extend well beyond the energy sector. Energy is embedded in production, feedstocks, transportation, and supply chains. Therefore, an energy disruption can quickly become a business-continuity issue for manufacturers, retailers, technology companies, and others. Few companies can insulate themselves completely.<\/p>\n
What does this mean for management teams?<\/p>\n
Identify the dependencies that could interrupt the business.<\/strong>\u00a0Companies should look beyond direct energy purchases to understand dependencies across fuels and feedstocks, suppliers, operations, infrastructure, and trade routes\u2014and identify where a disruption could materially impair operations.\u00a0<\/p>\n For companies, dependencies can be particularly complex because they operate across jurisdictions and sectors. Dependencies can also be counterintuitive: even a factory in a major energy exporter may rely on imports of a specific fuel or feedstock.\u00a0<\/p>\n The goal is to distinguish dependencies the business can tolerate from those that could become critical vulnerabilities.<\/p>\n The highest-priority vulnerabilities can then be stress-tested and responses formulated accordingly. Scenario planning, decision triggers, and accountabilities can help companies act quickly when disruption comes.<\/p>\n Build a portfolio of options\u2014and the flexibility to use them.<\/strong>\u00a0The Strait of Hormuz disruption shows the importance of having multiple buffers. Depending on the exposure, companies may need some combination of alternative fuels and feedstocks, diversified suppliers and routes, inventories, efficiency and electrification, or new and captive supply. The right portfolio depends on the context, time horizon, and trade-offs involved.\u00a0<\/p>\n But the recent disruption in the Strait of Hormuz\u00a0also shows why having options is not enough. As a disruption evolves, some may become constrained or unavailable. Flexibility\u2014the capacity to make changes easily and at manageable cost\u2014can therefore enhance resilience.<\/p>\n Input flexibility can allow equipment to switch fuels or feedstocks. Reliance, an Indian conglomerate, runs a refining complex that can process over 200 crude grades, for instance. Manufacturing flexibility can shift production between sites. Logistics flexibility can provide access to alternative ports, carriers, storage, and suppliers. During Europe\u2019s 2022 gas shock, Yara, a chemicals company, reduced ammonia production in Europe while supplying fertilizer plants with ammonia produced elsewhere.\u00a0<\/p>\n Commercial flexibility matters too. Physical alternatives are of little use if contracts prevent them from being exercised. Destination-free LNG contracts, for example, give buyers greater ability to redirect or resell cargoes during a shock.\u00a0<\/p>\n Value resilience explicitly in investment decisions.<\/strong>\u00a0Capacity that looks redundant, or flexibility that carries a cost, can acquire substantial value when disruption threatens operations. The business case should therefore reflect the value of resilience not just in normal conditions, but under stress.<\/p>\n Energy efficiency, for example, can reduce operating costs in normal times, while lowering exposure to price spikes during disruptions. Moreover, every unit of energy a company does not use is one less that other security measures need to cover.<\/p>\n Resilience can also help companies perform through disruption. BASF, a chemicals producer, had been disrupted by the 2022 gas shock. Yet it increased volumes by 7% year-over-year in the second quarter of 2026 amid Middle East supply disruptions, highlighting its diversified production, flexible facilities that could take in multiple inputs, and trading operations that could quickly secure new supplies.<\/p>\n And resilience can create growth opportunities as companies help others manage their energy security. Those opportunities will vary by market: grid-equipment manufacturers may benefit where electrification is accelerating; energy traders where flows and suppliers are being rewired; and other businesses in storage, efficiency, and demand flexibility.<\/p>\n The objective for companies is not to predict every disruption or eliminate every dependency. It is to identify the dependencies that matter and preserve the options and flexibility to operate when conditions change.<\/p>\n The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of <\/em>Fortune.<\/em><\/p>\n<\/div>\n #critical #pipeline #helped #cushion #Hormuz #shock #shut #Heres #reveals #corporate #energy #security<\/p>\n","protected":false},"excerpt":{"rendered":" Saudi Arabia\u2019s East-West pipel… <\/p>\n","protected":false},"author":1,"featured_media":4823,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[921,3063,7870,424,936,1544,1064,456,717,2658,2083,913,1566,2573,2224],"class_list":["post-4822","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-corporate","tag-critical","tag-cushion","tag-energy","tag-helped","tag-heres","tag-hormuz","tag-iran","tag-oil","tag-pipeline","tag-reveals","tag-security","tag-shock","tag-shut","tag-strait-of-hormuz"],"yoast_head":"\n
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