The ongoing Middle East conflict shocks the energy and chip markets

The escalating conflict in the Middle East is rapidly translating into economic consequences far beyond the region. Energy markets, shipping routes, and global trade flows are already feeling the impact as geopolitical tensions disrupt critical infrastructure and transportation corridors. With oil prices rising and shipping traffic through key waterways slowing, the ripple effects are beginning to influence manufacturing costs and supply-chain stability worldwide. In the weeks prior, South Korean officials warned of the upcoming disruption, specifically due to the region's high concentration of natural resources.

Helium is one such resource. While the U.S. produces most of the world's supply, Qatar comes second. If supplies are cut off, it could increase manufacturing costs, as supply and demand drive up helium prices. This would be another added cost on an already taxed supply chain, possibly impacting consumer sales as the war continues.  

War in the Middle East drives global economic ripple effects

The U.S.-Israeli strikes on Iran that began last month have triggered something the semiconductor industry has long planned for but not been forced to confront: an extended disruption in the Strait of Hormuz.  

The 21-mile-wide choke point sees roughly 20% of the world’s oil and liquefied natural gas (LNG) trade move through it daily. Since the opening strikes, commercial traffic through the strait has been severely disrupted. With more than a dozen attacks confirmed on merchant vessels, tanker traffic has plunged to near zero as the world watches in wait.  

According to data from the World Economic Forum, oil prices have responded in dramatic fashion. Brent Crude, the benchmark for international oil pricing, surged to $120 a barrel as the market began pricing in the risk of sustained disruption. Most analysts predict that figure will move even higher if the conflict persists.  

Notably, more than 80% of the oil and LNG shipped through the Strait of Hormuz goes to Asian markets, with China, India, Japan, and South Korea as the primary destinations. Japan relies on Middle Eastern oil for about 90% of its crude imports, while South Korea, a critical node in semiconductor manufacturing, sources roughly 70% of its crude oil from the region and routes more than 95% through the strait.  

In response, Seoul officials activated a roughly $68 billion market stabilization program to control prices and keep supply levels balanced. Even so, rising energy prices are likely to contribute to global inflation and further economic uncertainty if the conflict continues or expands.  

Higher oil and LNG prices feed directly into fab operating costs, shipping rates, and the prices of energy-intensive upstream inputs. Disruption extending several more weeks or longer will materially tighten the global energy market and exacerbate the pricing challenges already pummeling the chip sector.  

There is also a less-discussed dimension to the conflict with direct relevance to semiconductor manufacturing. The conflict has put roughly one-third of the world’s helium supply in jeopardy following damage to the Ras Laffan energy hub in Qatar.  

Helium is essential for semiconductor manufacturing, medical imaging, and other tech industry applications. A prolonged disruption would tighten an already concentrated market, potentially becoming a serious constraint for industrial supply chains.

For the semiconductor industry, which had already been managing supply chain fragility from tariffs, export controls, and memory allocation pressure, the Hormuz crisis adds another systemic variable that must be monitored closely.  

CPU constraints ward off customers

The memory shortage gripping the PC market is now sharing real estate with a familiar face as CPU supply is also succumbing to wider pressures. These constraints have converged at the worst possible time for notebook brands, and the compounding effect on BOM costs is severe enough that it is actively reshaping buying behavior.  

Intel Global Channel Chief Dave Guzzi acknowledged publicly that lacking CPU availability is affecting its customers across the board. He stressed that the situation does not reflect selective prioritization of AI and infrastructure customers over others as seen in the memory sector. The shortage, he said, instead indicates broad supply tightness and high demand. Guzzi also noted that he doesn’t expect to see memory-like price increases for CPUs.  

However, that framing may be an attempt to soften the underlying reality. Data from TrendForce indicates that AI-related computing workloads may still be the villain here. As demand for AI continues to grow, upstream advanced process and packaging capacity has increasingly been prioritized for high-performance products, crowding out entry-level and lower-end CPUs.  

Under normal conditions, the combined share of BOM costs across memory and CPU for a $900 notebook is about 45%. However, with prices rising, analysts project this figure could soon reach as high as 58%.  

The downstream consequences are already visible. Manufacturers have raised prices by more than 15% on certain entry-level and older-generation notebooks running on Intel processors. Additional increases for mainstream and mid-to-high-end platforms are likely in Q2 2026.

Moreover, many customers who typically buy Intel-based Chromebooks are increasingly shifting toward MediaTek devices due to price increases as shortages continue. That migration away from Intel-based platforms, driven by cost pressure rather than performance preference, is a signal worth watching.

A mild rebound is expected in Q2 2026 as Intel's CPU supply improves, but the scale of the recovery will depend on how brands adjust costs, manage inventory, and gauge consumer acceptance of higher prices in the back half of the year.

For supply chain leaders, the tightening CPU market is a reminder that geopolitical events and AI -driven demand don’t stay contained to a single product category. Energy price shocks and supply crunches can quickly cascade into higher manufacturing costs and shipping disruptions across technology and industrial markets.  

Supply chain resilience now requires deeper visibility into geopolitical risk, making proactive sourcing intelligence and diversification essential tools for navigating an increasingly volatile global landscape.

Sourceability helps organizations build sourcing resilience by identifying supplier exposure to geopolitical risk and providing real-time intelligence to guide proactive procurement strategy adjustment, supplier base diversification, and cost management in a volatile market before the impact reaches production lines.