Supply shocks are becoming more commonplace in the modern economic environment, and businesses could benefit from reassessing how they prepare for such events, according to ANZ’s Daniel Hynes.
In a video with ANZ Institutional Insights, Hynes, a Senior Commodity Strategist at ANZ, said the crisis in the Middle East was leading businesses to reassess their longer-term supply-chain strategies, with the intention of “de-risking their businesses for this type of event occurring in the future”.
“[What] we've seen over the past few years suggests that these are [not] isolated instances,” he said. “They are becoming relatively common.
“I think industry and business will probably need to better prepare for these types of events in the future.”
Watch the video below to find out more.
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Hynes said the impact of higher energy prices, spurred by the conflict, was beginning to affect investment decisions for large businesses, particularly those with an eye on the longer-term.
“The sheer increase in costs is raising the floor in a lot of these markets and in some cases could completely disrupt those supply chains,” he said. “So the impact is immense.”
The crisis has seen “between 10 per cent and 15 per cent of world oil supply disrupted in some form,” Hynes told Institutional Insights.
Such “upheaval”, he said, had left participants confused on where markets may go next, particularly given the “mixed messaging” coming from parties in the conflict.
“Volatility is still extremely high,” he said. “And that presents a lot of challenges… not just for the market itself, but broader industry.”
You can watch the video above to find out more.
