Muscat: The conflict in the region continues amid a fragile ceasefire, but the situation also presents an opportunity for stakeholders in the GCC to revise strategies to overcome these challenges and insulate themselves from such shocks in the future.
"In particular, Oman’s geographical position, with key ports on the Arabian Sea, highlights the importance of diversified access points across the region. Strengthening connectivity between ports, inland corridors, and neighbouring markets, including through rail, can support more integrated and flexible logistics flows across the GCC, according to a logistics expert."
Replying to the Observer, Dominik Baumeister, senior partner and global transport & logistics lead, PwC Middle East, said, "For the GCC, the current environment reinforces the importance of connectivity, integration, and coordination across the region. Established hubs continue to play a central role, but the emphasis is shifting towards how effectively different nodes within the region can work together. There is increasing focus on multimodal connectivity, inland corridors, and cross-border interoperability. A more coordinated regional approach can strengthen overall resilience and ensure that the GCC remains a key part of global trade flows."
He added, "Regarding the long-term economic and geopolitical implications for global markets, he said, "The current disruption is contributing to a broader shift towards a more fragmented and multipolar trade environment. Supply chains are becoming more regionally anchored, and trade relationships are increasingly influenced by risk management and alignment considerations.
"This does not represent a reversal of global trade, but rather a reconfiguration. Over time, this may result in a more diversified network of trade corridors and partnerships, with greater emphasis on reliability and continuity."
Businesses are adapting by embedding resilience into supply chain design.
This includes diversifying sourcing strategies, building flexibility across logistics networks, and increasing visibility across operations.There is also a growing focus on multimodal logistics, enabling goods to move across sea, land, and air depending on conditions. In parallel, companies are strengthening partnerships and securing capacity to ensure continuity under disruption, he added.Ultimately, there will need to be a recognition that the required increase in resilience will come at a cost. Still, the additional cost may well be worth it in times of continued geopolitical fragmentation.
Renewables
The current environment is likely to reinforce existing trends around diversification in energy systems, including continued investment in alternative energy sources.At the same time, the transition remains complex and will depend on a range of factors, including infrastructure, technology, and market dynamics. Rather than a single trajectory, it is more likely to evolve through a combination of gradual shifts and region-specific developments.
On sectors with major disadvantages, he said that the impact varies across sectors depending on their level of exposure to physical supply chains and their ability to adapt. Sectors that rely heavily on stable, high-volume logistics flows, such as energy and heavy industry, are more exposed to disruption.Conversely, sectors with greater flexibility, diversified supply chains, or stronger integration across logistics networks tend to demonstrate higher relative resilience.
Logistics providers that can offer multimodal solutions are also better positioned to adapt to changing conditions.
Oil and Gas
On the global perspective on how trade flows are being reconfigured, he said, "It is important to differentiate between Oil and Gas (O&G) trade and containerised good trade flows.
In O&G, there is limited ability to re-route exports from the Gulf region, and hence countries that depend on O&G imports from the gulf region are initially using reserves and are trying to source energy from alternative sources.Long-termIn the long term, prolonged disruption could reinforce energy diversification efforts in some importing markets, while O&G exports from the Gulf would remain an important part of global energy supply.In containerised goods, we need to differentiate between imports/exports and transshipments.
About imports/exports to and from the region, the global trade impact is limited.The region retains significant logistics capacity, although costs, routing, and transit times may be affected, for example, with increased investment into rail or West Saudi Arabian Port capacity.With regards to transshipments, replacing highly efficient hubs such as in the Gulf will take time. "Such shifts would depend on the duration and severity of any disruption to key maritime routes. Meanwhile, liners will find alternative hub locations, albeit at high cost and transit times," said Baumeister/
"This is accelerating the development of alternative trade corridors and increasing the role of inland and multimodal logistics. Over time, some of these adjustments may become embedded, contributing to a more distributed and flexible global trading system," he added.
Oman Observer is now on the WhatsApp channel. Click here
