Yin He Zheng Quan·2025-07-18 07:41Geopolitical Risks - The Middle East region has high geopolitical uncertainty, with structural conflicts persisting despite temporary de-escalation[8] - Iran's control over the Strait of Hormuz remains a significant risk factor for global shipping, even if complete blockage is unlikely[9] Impact on Global Supply Chains - If conflicts escalate, oil and chemical transport through the Strait of Hormuz could decrease by 25%, affecting over 12.7% of global oil demand[10] - In extreme scenarios, a blockade could leave a supply gap of approximately 13.1 million barrels per day, equating to 12.7% of global oil demand[10] Regional Vulnerabilities - Asian economies, particularly China, India, Japan, and South Korea, face the highest risks due to their reliance on Middle Eastern oil and gas[11] - In 2025, China is projected to import 5.4 million barrels per day, making it the largest importer through the Strait[58] Sector-Specific Impacts - The energy and chemical sectors will experience the most immediate impacts, with potential disruptions cascading to transportation, pharmaceuticals, and electronics[11] - High-tech manufacturing, particularly in Israel, may face supply chain disruptions, affecting exports of weapons, medical devices, and semiconductor components[11] Recommendations for China - China should diversify its import sources for products heavily reliant on the Middle East, such as fertilizers (87.7% dependency) and liquefied propane (50.5% dependency)[15] - The country is encouraged to enhance domestic production capabilities and explore alternative suppliers from countries like Canada, Algeria, and Brazil[87]