Trust as the Foundation of Global Trade in Times of Conflict
The recent military escalation involving the United States, Israel, and Iran has injected significant uncertainty into global markets, echoing historical patterns of geopolitical tension. Energy markets are already experiencing upward pressure due to the risk of supply disruptions in the strategically vital Strait of Hormuz, a chokepoint for approximately 20% of global oil consumption. Any prolonged interruption could send Brent crude oil soaring beyond $147 per barrel, a level not seen since the 2008 financial crisis, with cascading effects on supply chains worldwide.
Economic Impacts and Sectoral Vulnerabilities
Higher energy costs are poised to squeeze margins across energy-intensive industries such as chemicals, plastics, cement, glass, and metals, sectors still recovering from the shocks of the Ukraine war. Food supply chains are also at risk, as the Gulf region supplies key nitrogen inputs for fertilisers, and Egypt remains a crucial fertiliser exporter to Europe. A sustained disruption could simultaneously inflate energy prices, destabilise food markets, and strain industrial supply chains, leading to increased input costs, higher freight prices, and financial volatility.
This environment elevates the risk of payment defaults. According to Coface's latest modelling, even a modest tightening in financial conditions could drive global insolvency growth toward 5% in 2026. However, commerce has historically demonstrated resilience, adapting to evolving risks and shifting routes, as long as the financial infrastructure to support it remains intact.
Adaptation and Resilience in Global Trade
Drawing from 80 years of experience in insuring global trade, Coface has observed that trade rarely halts; instead, it adapts. In the current context, new corridors are emerging, such as shipping lines rerouting vessels through the Cape of Good Hope instead of the Middle East, and US Pacific ports seeing increased direct trade from East and Southeast Asia. Recent disruptions, including issues at the Panama and Suez canals and tariff-driven front-loading, have forced shipping companies to become more agile in managing global routes.
In 2025, despite tariffs and political rivalry, global trade volumes grew by 3.9%. The US-China trade tensions exemplify this adaptability: while US imports from China fell by about 30% in value, total US imports increased by 5% as trade flows shifted to partners like Vietnam, Mexico, and Thailand. In many cases, Chinese exports to these intermediary economies rose in parallel, illustrating how trade, much like water, finds alternative routes when blocked by tariffs, sanctions, or geopolitical pressure.
The Role of Trust and Insurance in Sustaining Commerce
As supply chains reroute through intermediary markets, trade networks are becoming more complex, pushing companies into unfamiliar territories and counterparties. This complexity underscores a fundamental truth: global trade does not operate solely on ships and ports—it runs on trust. Most international business occurs on credit, with goods shipped long before payment is received. Confidence between buyers, sellers, and banks is what keeps the system moving; if this confidence wanes, credit tightens and trade stalls.
History shows that trade is inherently robust, enabled by financial infrastructure such as trade credit insurance, risk analysis, and guarantees. In times of war and disruption, these tools are critical for maintaining the flow of commerce, ensuring that trust endures even amid geopolitical upheaval. Benoit Urbin, CEO UK & Ireland at Coface, emphasises that while risks are significant, the resilience of global trade, supported by trust and insurance, continues to drive adaptation and growth.
