Onyx Strategic Insights

In July, the US, Mexico, and Canada will undertake a joint review of the USMCA, opting to either extend the agreement until 2042 or trigger a decade-long sunset countdown. In this webinar, our Onyx experts will present their outlook on the USMCA review, including discussions on rules of origin, labor enforcement, and strategic shifts in North American supply chains. Wednesday, May 27 – 9 am Seattle / 12 pm New York: https://lnkd.in/gpXeb7es Thursday, May 28 – 9 am Singapore/10 am Tokyo: https://lnkd.in/gjncvXNx Thursday, May 28 – 11 am London: https://lnkd.in/gBxDv_Xr #usmca #supplychain #logistics #trade

A prolonged Iran war would likely force India to lean heavily on subsidies to soften the economic blow as well as to prevent rising fuel and food prices from becoming political flashpoints—but that support comes with real trade-offs. As subsidies expand, fiscal space tightens, and funding may have to be redirected away from manufacturing initiatives like the Production Linked Incentive (PLI) scheme. In the end, it is a delicate balancing act between managing immediate pressures and not losing sight of longer-term industrial growth. #geopolitics #India #middleeast

A prolonged Iran conflict is constraining emerging‑market fiscal capacity, with Vietnam a clear case in point: slower growth and wider deficits are tightening fiscal space just as infrastructure needs remain high, while elevated inflation further narrows financing options. The pressure is not only macro‑fiscal — higher fuel prices are raising commuting costs, reducing shifts and, in some cases, prompting cuts to working days, quietly dragging on labor productivity. Together, these dynamics illustrate classic second‑ and third‑order geopolitical risk, where a distant conflict erodes infrastructure investment capacity, compounds inflation and weakens productivity. #middleeast #vietnam #geopolitics

As the Iran war develops, downstream impacts to energy prices, inflation, political and fiscal risks in Asian economies are emerging. Join our Onyx analysts as we highlight risks to sourcing and production in Asia stemming from the Iran war. Thursday, May 7 – 9 am Seattle / 12 am New York: https://lnkd.in/gHSrmRmd Friday, May 8 – 9 am Singapore/10 am Tokyo: https://lnkd.in/g_wYDq7m Friday, May 8 – 11 am London: https://lnkd.in/gCtqvjb7 #iran #asia #supplychain #manufacturing

The escalation around Iran has pushed crude and refined product prices sharply higher, with jet fuel seeing the biggest strain. The jet–crude spread has blown out to record levels—around five times normal—as supply tightness and uncertainty ripple through the market. While pricing suggests this spike could ease within a few months if tensions cool, jet fuel is still likely to settle well above pre‑war levels. The implication is clear: even if crude prices normalize, airlines and air freight users should plan for structurally higher fuel costs and continued pressure on air rates. #middleeast #geopolitics #energy

Pakistan has moved quickly to contain the immediate fallout from Gulf disruptions, including tightening fuel inventories, prioritizing essential supply, and leaning on administrative pricing to manage volatility. However, these measures may prove inadequate given the structural nature of Pakistan’s energy exposure, which is fundamentally downstream and harder to manage. A disruption at the Strait of Hormuz does not transmit as a simple crude price shock. It compounds through higher freight and insurance costs, rupee depreciation, and domestic pass-throughs, creating a layered squeeze across fuel prices, inflation, and external balances. With import cover still limited to just a few months, Pakistan’s ability to absorb sustained increases in fuel costs remains significantly constrained. Diesel is the critical fault line. Pakistan remains heavily reliant on diesel to power road freight, agriculture, and backup generation for industry. As diesel prices rise, the effects cascade quickly – pushing up transport and food costs, feeding into broader inflation, and tightening supply chains. A similar dynamic was visible in the aftermath of the Russian invasion of Ukraine, where energy price shocks quickly fed into inflation and external imbalances across import-dependent economies. In this context, the challenge is not just elevated prices, but how quickly inflation and FX pressure feed back into fuel availability. Given its limited buffers, Pakistan faces a scenario where cost shocks increasingly translate into intermittent product shortages, raising the likelihood of stop-start manufacturing cycles rather than a smooth adjustment. #pakistan #iran #energy #supplychains

Next week: Iran War Update: Energy Market Volatility As the Iran conflict drags on, disruptions to energy supply are feeding into higher energy prices, fuel costs, and fuel surcharges. Join our Onyx analysts as we dissect the energy landscape, focusing on potential pathways in the next few weeks and months. Register now: Wednesday, April 15 – 10 am Seattle: https://lnkd.in/gvE95SEb Thursday, April 16 – 9 am Singapore: https://lnkd.in/gARFsFPP Thursday, April 16 – 11 am London: https://lnkd.in/g_RWXdbX

The US, Israel, and Iran reached a ceasefire agreement yesterday. One of the more striking details to emerge is a proposal for a $2 million per vessel toll for ships transiting the Strait of Hormuz. This is highly significant for its potential impact on international ship transits and the broader Gulf geopolitical dynamics and there are good reasons to question the viability of this tolling process.   But the figure itself should be put in perspective. A typical Very Large Crude Carrier (VLCC) – most commonly used for crude oil shipments - carries around 2 million barrels of crude, which brings that fee to roughly $1 per 42-gallon barrel of crude oil. With roughly 45% of a barrel yielding gasoline and around 30% diesel, that cost gets spread thinly across high-volume fuels, limiting its impact on end prices to less than 3 cents a gallon across a wide variety of products.   In practical terms, this $1 per barrel surcharge pales in comparison to the geopolitical surcharge of around $30 average in March. Even if the ceasefire holds – or a more durable agreement follows – some of that premium will persist. As long as the Strait of Hormuz remains a live geopolitical flashpoint, it is volatility, not transit costs, that will continue to shape pricing. #shipping #iran #hormuz #oil #surcharge #geopolitics

With the ongoing heavy disruption of the Strait of Hormuz, many countries are now experiencing energy crunch. Southeast Asia is quickly running into a fuel procurement squeeze—and it is happening faster than expected. The disruption in the Strait of Hormuz is not just pushing prices up; it is removing physical supply from the market. For import-dependent economies, that means tighter availability of gasoline and diesel, rising costs and delays for jet fuel, and pressure on petrochemical feedstocks. Tanker capacity is tightening, freight rates are climbing, and buyers are scrambling for non-Middle East cargoes at a premium or drawing down inventories. In short, this is no longer just a pricing issue—it is a supply problem. https://lnkd.in/gcPs2CCr

Air cargo flows across the Middle East remain uneven, with Israel and Kuwait likely to stay restricted in the near term as security constraints, airspace closures, and insurance risks continue to limit capacity. Cargo is being rerouted through alternative hubs, with Saudi Arabia—particularly Riyadh—emerging as a key corridor, although infrastructure limits mean congestion risks are already building. This emerging corridor is not risk‑free: any further conflict escalation or regional spillovers could quickly disrupt Saudi airspace or operations, undermining its role as a stable rerouting option. Elsewhere, recovery is patchy—Dubai is seeing cargo move again but inconsistently, with backlog risks lingering, while Doha’s rebound remains slow and selective—leaving the region in a state of adaptation rather than full normalization. #middleeast #geopolitics #aircargo