Because oil and gas underpin production, transportation, and logistics, higher energy costs will gradually move through supply chains—meaning the most significant economic consequences may not appear for months.

“The effects move slowly and appear in places people do not connect to energy,” says Tibor Besedes, professor in the School of Economics at Georgia Tech.

“Oil and natural gas are part of the cost structure for an enormous range of goods.”

About 20% of global oil and liquefied natural gas flows through the waterway linking the Persian Gulf to world markets. When that flow is constrained, the impact ripples outward across industries most people never associate with an energy crisis.

“In complex supply chains, a disruption in one critical link, even if only briefly, can cascade through the system, well beyond the initial event,” says Pinar Keskinocak, chair and professor in the H. Milton Stewart School of Industrial and Systems Engineering.

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