US investment firm KKR expects the Iran war to prompt greater investment in alternative supply routes to ensure goods keep moving around the region when traditional avenues are impacted by conflict.
Iran’s closure of the Strait of Hormuz has already led Gulf countries to seek alternatives to the narrow waterway, which most had relied on for the bulk of their trade flows. That is in line with a wider trend, with company bosses around the world telling KKR they are increasingly focused on what it dubs “the security of everything” — including access to critical minerals, energy, food, semiconductors, and water.
The interim deal struck by the US and Iran is unlikely to derail these trends. Indeed, a reopening of the Strait of Hormuz and sustained higher crude prices would be a boon to Gulf countries as they look to finance new trade routes and recover from the war. KKR also said markets were underestimating the outlook for oil prices over the next 12-18 months by up to $10 a barrel, even if the US and Iran reached a definitive agreement to end the war.