Surging Oil Prices Pose Tough Challenges for Transport and Logistics Enterprises

Surging Oil Prices Pose Tough Challenges for Transport and Logistics Enterprises

Author: Thai Khang

Fluctuations in the energy market mean that logistics could become a new shock to global trade and Vietnam. New military developments in the Middle East are emerging as a geopolitical variable for the global economy, causing oil prices to skyrocket worldwide.

For Vietnam, the impact of this conflict does not stem from direct trade relations, as trade turnover between Vietnam and Iran or Israel accounts for only a small portion of the economy's total import-export turnover of over $900 billion. However, with trade openness among the highest in the world—equivalent to nearly 200% of GDP—Vietnam is particularly sensitive to external shocks.

The impact of the conflict is primarily transmitted through three indirect channels: energy prices, logistics costs, and global financial fluctuations.

Oil Prices: The Most Sensitive Variable

The energy market always reacts fastest to conflicts in the Middle East. This region accounts for about one-third of the global oil supply, with the transport route through the Strait of Hormuz alone accounting for nearly 20% of international daily traded oil.

• A mere $10/barrel increase in oil prices can raise energy import costs for many Asian economies by tens of billions of dollars annually.

• In 2025, Vietnam imported 9.9 million tons of petroleum products (approx. $6.8 billion) and 14.1 million tons of crude oil (approx. $7.7 billion).

When global oil prices rise, cost-push inflation pressure appears almost immediately. Fuel is an input for most economic sectors. Transport costs alone account for 15–20% of the cost structure in many manufacturing industries, so energy fluctuations spread rapidly throughout the economy.

Rising Global Transport and Logistics Costs

The Middle East is a crossroads for key maritime routes connecting Asia and Europe. When this region becomes unstable, shipping lines often increase maritime insurance premiums, adjust routes, or extend journeys to avoid high-risk areas.

Lessons from the 2021–2022 period show that container costs from Asia to Europe once increased 4–5 times when global supply chains were disrupted. For Vietnam, with an export turnover exceeding $475 billion in 2025, logistics is a key factor in the competitiveness of goods. Rising transport prices shrink the profit margins of export enterprises, especially in low-value-added sectors like textiles, wood, and electronics processing.

Financial Markets: Exchange Rate and Capital Flow Pressures

During geopolitical instability, investors tend to withdraw capital from risky markets to seek safe-haven assets like the USD, gold, or US government bonds. This can pressure exchange rates in emerging economies.

In the short term, the greatest risks to the Vietnamese economy remain cost-push inflation and rising transport costs. In the long term, the impact will depend on the duration of the conflict and the stability of the global energy market. If tensions escalate, an export-oriented economy like Vietnam will find it difficult to remain unaffected.

Source: vietnamnet.vn