Trump’s ship rescue won’t prevent supply chain shock

Even if Donald Trump frees ships in the Strait of Hormuz, supply chains face a growing “latency shock” that will weigh on the world economy, Nigel Green, CEO of leading financial advisory deVere Group has warned. Crude oil prices fell in volatile trade following the announcement of “Project Freedom,” the US-led effort, announced late on Sunday, to guide stranded vessels out of the critical waterway. Brent crude dipped while US benchmark prices also edged lower as markets responded to the prospect of vessels beginning to move again after weeks of disruption. Around 1,000 commercial ships and tens of thousands of seafarers have been caught up in the blockage, with flows through one of the world’s most critical energy arteries grinding close to a halt. Green said that markets are reacting to the idea that ships will start moving again, but the system doesn’t reset instantly. “There’s a real latency shock to consider. Convoys have to be coordinated, routes are being altered, inspections are increasing. All of this adds time, and time is now the pressure point in global trade. “The real disruption goes beyond the oil price. It sits in how long everything takes to move from one point to another.” The Strait has historically handled roughly a fifth of world energy supply, making any sustained disruption a significant stress point for markets. “The introduction of escorted shipping corridors may ease immediate congestion, but it also introduces new layers of operational complexity,” Green added. Shipping firms now face tighter scheduling constraints, increased security procedures, and extended turnaround times. Insurance premiums are rising, and logistical planning is becoming more uncertain as companies adjust to a slower, more fragmented operating environment. The deVere chief executive explained that every additional hour at sea or waiting clearance feeds into cost structures across industries. Delivery delays “Manufacturers are dealing with delayed inputs. Retailers are facing longer delivery timelines. Energy buyers are navigating uncertainty around supply reliability. “These are not isolated effects. They ripple through the global economy and reinforce inflationary pressure at multiple levels.” The backlog of vessels is expected to take time to unwind, even with coordinated efforts to guide ships out of the restricted waterway. Supply chains built on precision and efficiency are now being tested by delays that are difficult to predict and harder to manage. Nigel Green said that businesses have spent years optimising for speed and cost efficiency. What they are facing now is unpredictability. “This shift matters. It forces companies to hold more inventory, reassess sourcing strategies, and absorb higher operational costs. All of this feeds into pricing, and ultimately into the broader inflation picture.” Markets have so far taken a relatively measured view, with oil prices easing on the assumption that movement will resume. However, the underlying disruption remains significant, particularly as geopolitical tensions continue to shape access to key trade routes. Green added that the focus on headline oil prices risks missing the broader story. “The cost of moving goods is rising because the system itself has slowed down. Latency is becoming embedded, and that changes how world trade functions. As diplomatic discussions continue and military support underpins efforts to restore shipping flows, the outlook remains uncertain. The immediate release of vessels may ease some pressure, but the structural impact of disruption is unlikely to fade quickly. “Global supply chains are under strain in ways that are not immediately visible in market prices,” the deVere CEO concluded. “The assumption of seamless movement has been challenged, and the consequences will continue to unfold across economies and industries.” The post Trump’s ship rescue won’t prevent supply chain shock appeared first on Financial Mirror.