Imported goods in Russia have seen price increases of up to 10% due to the Iran conflict
On April 10, a survey by IZVESTIA revealed that due to the Middle East conflict, prices of certain imported goods in Russia have risen by 5%–10%. Prices of various products are rising globally. In Russia, since late February, prices for automotive parts and electronic products have surged, as a large portion of these goods are sourced through Persian Gulf countries.
Supply chain disruptions have caused logistics costs to skyrocket. Even after the U.S. and Iran announced a ceasefire, the situation has not quickly returned to normal—restrictions on passage through the Strait of Hormuz remain in place, continuing to impact markets.
Current Situation at the Strait of Hormuz
As of April 9, the Strait of Hormuz has been effectively blockaded. Although multiple governments have declared their commitment to ensuring freedom of navigation through the strait, vessels still cannot pass normally. The current situation is already affecting global consumer prices.
Vladimir Chernov, analyst at Freedom Finance Global, believes this regional maritime crisis is rapidly evolving into a global inflation factor, and the market has only just begun to feel its impact.
On April 8, following a ceasefire agreement with the United States, Iranian Foreign Minister Araghchi stated that Iran would open the strait to passing vessels for two weeks, but passage would require coordination with Iran’s armed forces and adherence to technical restrictions. However, less than 24 hours later, Iran’s state-run Press TV announced the strait was closed again. The situation continues to fluctuate.
Igor Rastorguyev, Chief Analyst at AMarkets, said, “Shipowners and insurers will be extremely cautious; they will carefully assess risks before dispatching ships through the strait.”
Logistics have already accumulated significant effects. Hundreds of vessels are now gathering near the strait, including over 200 tankers, with the total number potentially reaching 600–1,000. Some ships are stranded, while others are forced to reroute. Shipping routes have extended by thousands of miles, driving costs sharply upward. Market participants are urgently restructuring supply chains, factoring in new risks such as shipping restrictions and soaring insurance premiums. The domino effect has already begun: transportation cost increases are pushing up raw material and finished product prices far beyond the region.
Price Increases in Russian Goods Amid U.S.-Iran Conflict
Russia has not escaped the price surge. Alexey Ivanov, CEO of the "Soyuz Tras" retail chain, said that since late February, automotive parts have increased in price due to the Middle East conflict. Price hikes vary by product category and supply model, but the trend has stabilized.
In recent years, the UAE has become a key transit hub for Russia, with about 60% of related cargo passing through the Strait of Hormuz.
Alexey Shilnyak, Director of Government Relations at the "Mikhailov & Partners" group, reported that several categories in Russia have already experienced noticeable price increases:
- High-tech components (lithium-ion batteries, semiconductor elements): increase exceeding 10%
- Automotive parts (components from Southeast Asia and Europe): rise of 7.8%–9.2%
- Electrical and electronic products (cables, transformers, household appliances): increase of 6.5%–8.7%
Rodin.Capital founder and financial advisor Alexey Rodin stated that suppliers have been forced to adjust prices due to supply chain disruptions, resulting in an overall average increase of approximately 5%–10%.
The price hikes are not limited to auto parts and electronics. Rising energy prices have driven up costs across a broad range of goods—from plastics and lubricants to fuel; lubricant prices have climbed alongside oil prices.
The agricultural sector is also affected. Supply disruptions have led to higher prices for ammonia and sulfur, key raw materials for fertilizer production, causing urea prices to rise by around 50%, which may further transmit to agricultural product prices.
Middle Eastern countries account for over one-quarter of global exports of esters and ether alcohols. Disruptions in supply could lead to shortages of paints, personal care products, and packaging materials.
How Long Until Trade Chains Recover?
Even if a formal ceasefire is achieved, shipping cannot resume quickly. Full restoration of operations in the strait may take 4–7 months, with only a 75%–80% probability of stable logistics being restored by late summer.
The ceasefire was announced temporarily for two weeks, and reports of violations emerged on the first day: Israel attacked an oil refinery in southern Iran, while simultaneously striking Beirut and southern Lebanon. If Israel continues these attacks, Iran may withdraw from the ceasefire.
High insurance rates and freight costs add additional pressure. Air freight costs on certain routes have risen by 70% since March, and rates for large oil tankers have reached record highs. Thus, supply chain recovery will take several months.
Goods shipped before the escalation could still be supplied at original prices, with some inventory remaining. It is expected that price increases will become more pronounced within 1–2 months, when roughly 7–8 weeks of inventory are gradually depleted.
Original equipment parts for European and Japanese cars are likely to see the largest price increases, especially for older models. Chinese automotive parts transported via rail are experiencing slower price growth. Some supply has shifted to Turkey and China, where these routes have so far seen no major price spikes.
Recovery of industrial infrastructure in the Persian Gulf region will also take time. Restoring aluminum production in the UAE and regional refineries could take up to a year. LNG terminals, due to their complex equipment, require even greater investment in funds and manpower. During this period, price pressures will persist.
The ceasefire can only partially relieve market stress. Overall, it cannot fully calm the situation in the Middle East: both the U.S. and Iran may use this window to reinforce their military presence. Experts believe that conflict is highly likely to reignite before the two-week ceasefire expires.
Moreover, the global supply issues across various goods have benefited the United States significantly, particularly in the areas of LNG, machinery, and automobiles. Previously, Trump had stated that security of the Strait of Hormuz should be the responsibility of countries importing oil through it—America has no direct involvement.
Original article: toutiao.com/article/1862045269062732/
Disclaimer: This article represents the personal views of the author