Even if the US military succeeds in freeing stranded ships from the Strait of Hormuz under “Project Freedom,” the global economy faces a prolonged “latency shock” that oil price moves alone will not capture, the chief executive of one of the world’s largest independent financial advisory firms has warned.
Nigel Green, chief executive officer of deVere Group, issued the warning on Monday as markets reacted to US President Donald Trump’s announcement of the operation, which was initially met with a brief dip in crude prices before oil surged sharply higher after Iran rejected the plan and struck energy infrastructure in the United Arab Emirates (UAE). Green argues that focusing on oil prices misses the deeper and more lasting damage being done to global supply chain efficiency.
Around 1,000 commercial ships and tens of thousands of seafarers have been caught up in the Hormuz blockage, with flows through a waterway that historically handles roughly a fifth of global energy supply grinding close to a halt since late February. Green says the system cannot simply restart once ships begin to move.
“Markets are reacting to the idea that ships will start moving again, but the system doesn’t reset instantly,” he said. “Convoys have to be coordinated, routes are being altered, and inspections are increasing. All of this adds time, and time is now the pressure point in global trade.”
The Second-Order Effects
Green’s core argument is that the real disruption lies not in the oil price itself but in the cumulative friction building across global logistics. Shipping firms are operating under tighter scheduling constraints, increased security procedures, and extended turnaround times. War-risk insurance premiums have risen, and logistical planning has become harder to execute as companies adjust to a slower and more fragmented operating environment.
“Every additional hour at sea or waiting clearance feeds into cost structures across industries,” Green said. “Manufacturers are dealing with delayed inputs. Retailers are facing longer delivery timelines. Energy buyers are navigating uncertainty around supply reliability.”
The consequences are not contained within the energy sector. Supply chains built on precision and speed are being tested by delays that are difficult to predict, forcing companies to hold larger inventory buffers, reassess sourcing strategies, and absorb higher operational costs, all of which Green says will feed into broader price inflation.
“Businesses have spent years optimising for speed and cost efficiency. What they are facing now is unpredictability,” he said. “The focus on headline oil prices risks missing the broader story. The cost of moving goods is rising because the system itself has slowed down. Latency is becoming embedded, and that changes how global trade functions.”
Green concluded that investors need to look beyond immediate price moves and account for the second-order effects that will unfold across economies over time. “Global supply chains are under strain in ways that are not immediately visible in market prices,” he said. “The assumption of seamless movement has been challenged, and the consequences will continue to unfold across economies and industries.”
As of Monday afternoon, with Iran having attacked the Fujairah Oil Industry Zone in the UAE and warned US warships against approaching the strait, oil markets had reversed any early relief, with Brent crude climbing sharply toward $114 a barrel, reinforcing the case that the disruption is far from resolved.
