In a report published earlier this month, S&P Global Mobility<\/a> noted transport companies are already avoiding Hormuz, spooked by the risk of getting caught in the crossfire. The practical effect is the same as a closure: sharply higher insurance premiums, longer alternative routes, and a global shipping system that is beginning to seize up.<\/p>\n Asia-sourced components for European auto production have the most immediate vulnerability, analyst Stephanie Brinley wrote, and just-in-time supply chains<\/a> are under pressure.<\/p>\n The risks of transiting Hormuz, Brinley wrote, have raised \u201cinsurance costs for cargo and ships while increasing logistics costs for shippers choosing alternate routes.\u201d<\/p>\n The cascading effects go beyond insurance. Vessels rerouting around the strait are displacing containers and cargo from their intended locations, with knock-on effects rippling through subsequent shipping contracts.<\/p>\n Read more:\u00a0How oil price shocks ripple through your wallet, from gas to groceries<\/a><\/p>\n AutoForecast Solutions manufacturing expert Sam Fiorani also said the spillover effects would be quite costly.<\/p>\n \u201cRerouting shipments around the Strait of Hormuz will add days or weeks to travel time, adding to freight costs and causing a backlog from the slower cargo turnover. And that\u2019s before any increase in the cost of \u2018war risk insurance premiums,\u201d he wrote.<\/p>\n In addition, some of these cargo ships burn as much as 200,000 gallons of diesel fuel a day, just as diesel costs soar<\/a>.<\/p>\n Then there are supply chain ramifications.<\/p>\n S&P Global\u2019s Brinley noted Turkey as particularly exposed among countries with auto production. She warned that supply chain disruptions \u201cwould begin to affect production in Turkey earlier than in other areas,\u201d which is significant given Turkey\u2019s role as a major supplier of light commercial vehicles to the European market.<\/p>\n But it\u2019s not just Turkey and European producers that will be affected.<\/p>\n \u201cThough Iran itself isn\u2019t a semiconductor producer, the conflict\u2019s disruption to global shipping will cause chip deliveries to be delayed or stranded at ports in Asia, reducing availability for assembly lines,\u201d Fiorani added. \u201cGiven that modern vehicles may contain as many as 3,000 chips each, and the industry hasn\u2019t completely recovered from a number of supply chain issues over the last half decade, another disruption magnifies the ongoing vulnerability.\u201d<\/p>\n Story continues <\/p>\n As for the Iranian and greater Middle East auto market, North American-built vehicles have a relatively small market share, Fiorani said. Asian and Chinese automakers dominate, but European automakers are not far behind, selling nearly four times as many vehicles in the region as North American-based manufacturers do \u2014 meaning Europe-centric companies like Stellantis (STLA<\/a>) and Renault (RNO.PA<\/a>) are most exposed.<\/p>\n Nissan CEO Ivan Espinosa said last week that the conflict was disrupting the distribution of Nissan products<\/a> across the Middle East, which is Nissan\u2019s number two export market. On Thursday, Toyota CEO Koji Sato echoed those statements<\/a>, claiming closure of Hormuz was a \u201ckey challenge\u201d for shipping its vehicles.<\/p>\n Beyond shipping, rising oil and natural gas prices are working their way through the broader economy and through the cost of building a car. Steel, aluminum, plastics, resins \u2014 virtually every part in a vehicle’s bill of materials has energy embedded in it.<\/p>\n Read more:\u00a0What an extended war with Iran could mean for gas prices<\/a><\/p>\n S&P\u2019s Brinley warned that if the conflict persists, \u201cproduction cost inflation would become more entrenched,\u201d echoing the dynamics of the semiconductor crisis, when automakers prioritized higher-margin models over affordable entry-level vehicles.<\/p>\n Not surprisingly, Fiorani added that increased costs will be borne by consumers.<\/p>\n \u201cAutomotive manufacturers operate on very thin margins compared to many high tech sectors,\u201d he said. \u201cThere\u2019s just no room to absorb dramatic changes in input costs such as steel, plastics, and freight, and, ultimately, prices to the consumer rise.\u201d<\/p>\n Consumers, already stretched thin by rising overall inflation<\/a>, could find new vehicle purchases increasingly out of reach, but there is one potential silver lining buried in the disruption.<\/p>\n Brinley noted sustained fuel cost increases could see consumers increase \u201cconsideration for hybrid or electric vehicles to avoid anticipated fuel cost increases\u201d \u2014 a demand shift that automakers with EV lineups, such as General Motors (GM<\/a>), could capture.<\/p>\n While EV sales in regions like Europe are growing at a healthy clip<\/a>, it\u2019s a different story in the US, where EV demand slumped after the federal EV tax credit expired.<\/p>\n But higher fuel prices for gas-thirsty SUVs mean EVs may be in the mix for US buyers.<\/p>\n \u201cExtended turmoil in the region could upset the oil market and accelerate EV adoption,\u201d AutoForecast\u2019s Fiorani said.<\/p>\n \u201cIf only to shield consumers from volatile gas prices, electrified vehicles could be the winner if the buying public does not anticipate a near term resolution.\u201d<\/p>\n Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X<\/a> and on Instagram<\/a>.<\/p>\n Click here for the latest technology news that will impact the stock market<\/a><\/p>\n Read the latest financial and business news from Yahoo Finance<\/a><\/p>\n ![\"Ships](\"https:\/\/www.europesays.com\/iran\/wp-content\/uploads\/2026\/03\/b7dbea50-1d53-11f1-b6fe-c746db7a38ed.jpeg\")
Ships line up in the Strait of Hormuz as seen from Mina Al Fajer, United Arab Emirates, on March 11. (AP Photo\/Altaf Qadri) \u00b7 ASSOCIATED PRESS <\/p>\n (Bildagentur-online\/Schoening\/Universal Images Group via Getty Images) \u00b7 Bildagentur-online via Getty Images <\/p>\n
Prices are posted at a gas station in Brooklyn, New York, on March 18. The war in the Middle East is influencing oil prices, reaching their highest level since 2023. This follows the closure of the Strait of Hormuz, a key route for transporting a portion of the world’s crude oil. (Matthew Hoen\/NurPhoto via Getty Images) \u00b7 NurPhoto via Getty Images <\/p>\n
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