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Most commentary on Iran and the Strait of Hormuz starts with oil. That is understandable. It is also where too many biotech and pharma boards stop.
For our sector, this is not mainly an oil story. It is a strategy story. More precisely, it tests whether a business built on global supply chains, controlled logistics, outsourced manufacturing and tightly managed clinical or launch timetables can still be executed when the price of certainty rises.
That price has already risen. On Tuesday, 10 March 2026, the U.S. Energy Information Administration reported that the Strait was effectively closed to most shipping traffic as of the previous day and forecast Brent would remain above $95 a barrel for the next two months. On Wednesday, 25 March 2026, the Associated Press reported that Iran had rejected a U.S.-backed ceasefire framework that included reopening the Strait. By Thursday, 26 March, the Associated Press reported Brent at just over $100 amid ongoing uncertainty over de-escalation. This is no longer a passing scare. It is a prolonged test of judgement.
Europe should resist one easy conclusion. Asia takes most of the direct flow through Hormuz. The more immediate European risk is not being first in line for a physical shortage. It is being hit through LNG competition, freight costs, war-risk cover, inflationary pressures, and a less forgiving capital market. That matters more because Europe is still reshaping its energy base. On Monday, 26 January 2026, the Council of the European Union approved a phased ban on Russian pipeline gas and LNG, with a full LNG ban from the beginning of 2027 and a full pipeline ban from autumn 2027. Europe has reduced one dependency but has not escaped imported volatility. It has simply changed the route by which that volatility arrives.
This is where the Life Sciences lens matters. An OECD analysis published in 2025 notes that many medical products cross three or more borders during production before reaching the final market. That is the operating model. Ingredients, intermediates, specialist packaging, controlled transport, and outsourced manufacturing all rely on timing and coordination that appear efficient in stable conditions and far more fragile under stress.
There is another layer that boards often overlook. The European Environment Agency reports that the chemical and petrochemical industry is the EU’s largest industrial energy consumer, accounting for 22% of final industrial energy use, and that seven petrochemicals underpin more than 90% of downstream organic chemical production globally. Energy shocks do not sit politely in the utilities line. They work their way into solvents, plastics, intermediates, packaging, and process economics. A board focused only on direct energy spend is focused on the least interesting part of the problem.
For biologics, vaccines, and other temperature-sensitive products, the exposure is more direct. UK good distribution practice requires medicines to be consistently stored, transported and handled under suitable conditions. The World Health Organization notes that many biological preparations are unstable during storage and that temperature deviations reduce safety, efficacy, and potency. When shipping routes become less reliable and specialist logistics more expensive, this is not merely an operational issue. It becomes a product integrity issue, a patient-supply issue, and, in some cases, a regulatory issue.
The implications vary by company stage. For a clinical-stage biotech, the question is whether runway, CMC planning, and vendor concentration can absorb higher costs and slower movement without distorting development plans. For a launch-stage company, the question is harsher. Launch credibility depends on a reliable supply, not persuasive slides. For larger pharma, this becomes a capital allocation test. Which parts of the network are genuinely resilient, and which are merely efficient in stable conditions? Boards that treat resilience as an operational detail are making a strategic decision by omission.
So, what should boards ask for now? Not another geopolitical briefing. They should ask management for an exposure map. Which APIs, excipients, single-use components, packaging inputs, cold-chain lanes, and contract manufacturers are directly or indirectly exposed to Gulf disruption, higher war-risk cover, or energy-price volatility? What happens under a six-week shock, a one-quarter shock and a six-month shock? Which programmes can slip without damaging the investment case? Which products carry the highest patient-supply risk? Which assumptions in the 2026 plan still depend on smooth logistics and benign working capital? These are not operational questions. They are strategic ones.
The mistake now would be to treat Hormuz as a macro event that treasury can hedge and operations can absorb. In biotech and pharma, supply fragility quickly becomes strategic fragility. It leads to delayed studies, weaker launches, cash pressure, loss of credibility, and reduced strategic flexibility. Boards that still believe resilience sit below strategy are about to learn otherwise.
In this sector, resilience is strategy.