Middle East Supply Chain Disruption 2025: Gartner Perspective

The global importance of this region makes it near-impossible for businesses to avoid impact. CSCOs must leverage the resilience built in recent years.

Why CSCOs must act now on the Israel-Iran conflict

Despite attempts at a ceasefire between Israel and Iran, no chief supply chain officer (CSCO) can ignore what this — and other — geopolitical flashpoints could mean for their business.

Container traffic through the Suez Canal dropped by 50% following the November 2023 Red Sea crisis — a stark precedent for what’s unfolding now. With 30% of global container traffic historically passing through this corridor, the implications are massive. Gartner outlines three strategic imperatives for CSCOs.

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3 strategic imperatives for CSCOs amid 2025 Middle East supply chain disruption

Today’s challenge isn’t just about rerouting shipments — it’s about preserving business continuity, protecting margins and maintaining customer trust. 

Imperative No. 1: Assess exposure to global bottlenecks

Gartner identifies four critical chokepoints: the Red Sea/Suez Canal, the Strait of Hormuz, regional high-volume ports (e.g., Jebel Ali, Haifa) and Eurasian railfreight. Each presents unique risks:

  • Red Sea/Suez Canal: APAC-to-Europe transit times could more than double.

  • Strait of Hormuz: Transit times may double or increase by up to 14 days.

  • Regional high-volume ports: Shipping costs could spike by 30% to 50%.

  • Eurasian railfreight: Railfreight delays of four to six weeks are likely due to demand surges.

What you may not know: Far East-to-Europe railfreight rose 9% YoY in early 2025, signaling a shift already underway.

Imperative No. 2: Prepare for cost volatility

Amid supply chain disruption, CSCOs must proactively brief CFOs on:

  • Fuel surcharges and marine insurance premiums, which have already risen 15% to 30%

  • Inventory holding costs, as “just-in-time” gives way to “just-in-case”

  • Technology investment gaps, especially in visibility and risk management tools

What you may not know: Underinvestment in supply chain tech has created more widespread vulnerabilities than many assume.

Imperative No. 3: Diversify sourcing and supplier networks

CSCOs must:

  • Reassess overreliance on Middle Eastern suppliers

  • Identify high-risk components and raw materials

  • Revalidate supplier risk management capabilities

What you may not know: According to the 2023 Gartner Future of Supply Chain Survey, two-thirds of supply chain leaders have invested in collaborative supplier relationships, but over 50% still face exposure due to geographic concentration.

The bottom line on responding to Middle East supply chain disruption

Gartner’s message is clear: Resilience is not a future goal — it’s a current necessity. The Israel-Iran conflict is a stress test for every supply chain strategy built since COVID-19. CSCOs who act now will not only mitigate supply chain risk but may also gain competitive advantage.

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