Military force (coercive) in Iran (general), Iran

Supply-chain Risk Briefing

1. Summary

China has been identified as implementing administrative sanctions against Iran, with related activities detected in the Gulf of Oman area. With a tension index of -5, a medium-to-high level geopolitical risk has emerged, and direct and indirect impacts on Iran's energy exports are anticipated.

2. Supply-chain impact

• Natural gas supply chain: Iran holds the world's 2nd largest natural gas reserves, and China's sanctions could potentially affect Iranian gas export routes and price volatility
• Asian LNG market: If China restricts imports of Iranian energy, intensified competition to secure alternative supply sources could create upward pressure on Asian LNG prices
• Persian Gulf logistics: Heightened tensions in the Gulf of Oman region could raise concerns about increased energy transportation costs and higher insurance premiums for maritime shipping routes
• Petrochemical feedstock: Reduced Chinese exports of Iranian petrochemical products could lead to potential restructuring of the global petrochemical supply chain

3. Watch points

• Strait of Hormuz traffic volume: Need to track impacts on global crude oil and gas transportation if tensions spread throughout the Persian Gulf region
• China's energy import diversification: Monitor trends in China's securing of alternative natural gas suppliers (Russia, Australia, Qatar) and contract changes