Why disruption is becoming structural, not cyclical. By Asees Bajaj
The impact of the Middle East conflict on supply chains has been nothing short of extensive. Higher energy prices have raised transport costs and forced factory closures, while world food supply is coming under threat as fertilizer and grain shipments struggle to gain passage through the Strait of Hormuz. At the same time, sectors including automotive, aviation, construction and technology are beginning to feel the cumulative effects of longer shipping routes and material shortages.
Yet the most important point for businesses is this: disruption is no longer a short-term shock to be absorbed. It is becoming a structural feature of the operating environment.
The strain and pressure that supply chains are operating under are far from over. Even in the case of a conflict de-escalation, in 2026 we expect four themes to continue shaping supply chain risk.
1. Trade protectionism
Geopolitical shifts will continue to drive trade barriers, sanctions and protectionist policies between major economies. These measures are not only redefining supply routes but also increasing costs and prompting shortages of key materials. At the same time, uncertainty is eroding confidence in existing free trade agreements. For businesses, this makes long-term supply chain planning more complex, forcing a shift away from pure cost optimization towards resilience-led decision making.
2. Regulatory tightening
Governments are mandating greater visibility across supply chains, particularly in relation to ESG, human rights, and sanctions compliance. For companies, especially in manufacturing and retail, this creates a dual challenge: shipments face a higher risk of being delayed or seized, while non-compliance carries significant financial and reputational consequences. As a result, proactive supplier due diligence is no longer optional. It is becoming a core operational requirement, even if it slows down procurement and increases cost.
3. Severe weather events
Climate-driven disruption is compounding geopolitical instability. Extreme weather events are al-ready affecting key trade routes and production hubs, particularly in agriculture and energy. The knock-on effect is not just physical disruption, but increased volatility in pricing and availability of raw materials. For many organizations, this introduces a layer of unpredictability that traditional risk models are not designed to handle.
4. Cyber attacks
Geopolitical tensions are also fostering conditions for more aggressive cyber campaigns by both state and non-state actors. Supply chains present multiple entry points for attackers, and the compromise of a single vendor can have cascading effects across an entire network. The implications are not limited to operational downtime; they extend to financial loss, regulatory exposure and long-term reputational damage.
For the most part, large organizations have adapted their supply chain networks to limit immediate disruption. This flexibility may reflect a lag effect, supported by sizeable inventory buffers and fiscal policies that have allowed producers to absorb higher costs. However, these buffers are eroding.
Shortages of critical raw materials are already contributing to elevated prices across sectors including healthcare, automotive and electronics. At the same time, governments are increasingly constrained in their ability to sustain fiscal support, as rising debt levels limit intervention capacity. The result is a more fragile operating environment, where shocks are harder to absorb and recovery timelines are extended.
Against this backdrop, businesses need to rethink how they define supply chain resilience.
■ Diversification alone is no longer sufficient. While nearshoring and multi-sourcing remain important, they can introduce new risks if not underpinned by robust intelligence and due diligence. Expanding into alternative markets without fully understanding the political, regulatory and security landscape can expose organizations to new vulnerabilities.
■ Visibility must extend beyond tier-one suppliers. Many of the most significant risks, from sanctions exposure to cyber vulnerabilities, originate deeper within supply chains. Organizations that fail to map and monitor these extended networks risk being blindsided by disruptions they cannot easily trace or control.
■ Resilience needs to be embedded at a strategic level. This means integrating geopolitical and security intelligence into core business decision-making, rather than treating it as a reactive or compliance-driven function. Companies that can anticipate disruption, rather than simply respond to it, will be better positioned to maintain continuity and protect margins.
The reality is that supply chains are entering a period of sustained instability, where geopolitical, regulatory, environmental and technological risks are increasingly interconnected
Those that succeed will be the organizations that move beyond short-term fixes and invest in a more informed, intelligence-led approach to supply chain risk.
Asees Bajaj, Associate, Strategic Intelligence, at S-RM, specializes in delivering bespoke advisory projects that assess geopolitical, security, macroeconomic, and regulatory risks to support clients’ strategic decision-making. Asees focuses on helping clients navigate increasingly complex geopolitical environments, with expertise in identifying sector-specific and supply chain risk exposures