The shocks reshaping global trade in 2026 are not a passing turbulence to ride out. According to PwC Middle East’s latest analysis, they mark a structural shift in how goods, energy and capital move across the world — one that is gradually redrawing the competitive map the GCC has spent decades building.

Choke points like the Strait of Hormuz have exposed the fragility of energy supply chains. Container flows have been redirected, congestion has built across regional hubs, and air cargo capacity has tightened in parallel, removing the usual fallback options for time-sensitive industries. At the same time, globalisation itself is fragmenting into regional corridors, near-shoring strategies, and trade alignments shaped as much by geopolitics as by economics.

Dominik Baumeister, senior partner and global transport and logistics lead at PwC Middle East, speaks to Gulf Business about what has fundamentally changed, where the UAE and the wider GCC are positioned, and what governments and businesses need to do to navigate a more fragmented, more contested trade system.

Your latest analysis suggests current trade disruptions are structural rather than temporary. What has fundamentally changed in global trade flows compared to previous shocks?

Our analysis highlights that the risk of structural changes has increased. The challenge that the incumbent model faces is that the longer the crisis persists, the more shippers and logistics companies will look for alternatives, and those alternatives might at some point get locked in more permanently, eroding the competitive advantage that the Middle East has established over the past few decades.

This effect will obviously not be black and white and largely depend on the commodity or freight shipped.

In Oil & Gas, the current impact on many countries around the world is severe, and governments may be forced to enter entirely new trade deals to ensure economic prosperity. We are also starting to see an increase of debate around alternative energy sources.

In containers, this is a different situation; while cost clearly have risen for the global movement of containerised goods, the impact is less dramatic, and the impact is more around less optimal operational efficiency considerations rather than entirely new alternatives. As it takes time — decades — to establish a well-functioning transshipment and re-export hub like Jebel Ali, it is unlikely that for example Dubai’s relevance will erode quickly. The UAE is also not staying still and actively working on increasing resilience. However, the risk of structural changes clearly remains.

With critical chokepoints like the Strait of Hormuz under pressure, how exposed are global energy and supply chains today, and are we underestimating that risk?

As we can see across the world right now, the exposure is very high in particular for energy, simply because so much of it moves through a single choke point. Any disruption here is felt quickly, and in fact less in the Middle East, than globally. So yes — the world has clearly underestimated this risk.

Oil markets have some room to adjust, and some limited alternative routes exist. Containers can be redirected, even if it adds time and cost. However, gas is far less flexible. LNG depends on fixed infrastructure and specific routes, so alternatives are limited in the short term. That’s where the real pressure builds.

The report highlights significant congestion across the GCC, with containers stranded and rerouted. How is this reshaping the role of regional hubs like the UAE in global trade?

The UAE’s advantage increasingly depends not just on location, but on integrated multimodal networks, corridor-based connectivity and digital trade systems — its role is expanding from moving cargo efficiently in normal conditions to keeping trade flowing under stress by linking ports, airports, inland corridors and digital systems into one coordinated platform. This matters because the crisis has made trade flows more “contestable”: cargo has been redirected, alternative routes have been tested as a result, regional hubs like the UAE are becoming not just gateways, but strategic nodes in a more fragmented global trade system, with competitiveness increasingly defined by reliability, connectivity and cross-border coordination.

The GCC countries are not standing still. For example, the UAE and Saudi Arabia are building an integrated sea-land corridor linking Khorfakkan Commercial Terminal, Sajaa Dry Port and Dammam to keep cargo moving while bypassing the Strait. That directly supports the point that the UAE’s role is expanding from a traditional transshipment hub into a resilience-oriented trade orchestrator built around inland logistics, multimodal connectivity and operational continuity under stress.

The GCC and Saudi Arabia rail networks will also add further flexibility, and the various ports that are not in the Persian gulf, such as Jeddah, Oxagon or Salala, are gaining relevance. So, if the GCC countries collaborate, they have a lot of opportunity to come out of this crisis ever stronger.

Air cargo capacity has also taken a hit. How do these constraints across both sea and air freight compound the disruption, and what does that mean for time-sensitive industries?

The simultaneous disruption across both maritime and air freight represents a significant escalation in supply chain complexity. Normally, if one is disrupted, you can, at least to a degree, lean on the other. That flexibility has been further limited today. The compounding effect comes from three structural dynamics:

First, the loss of fallback options. When ocean freight becomes unreliable, the inability to pivot to air removes the primary pressure valve for time-sensitive goods. This forces companies into suboptimal choices: accepting delays, paying extreme premiums, or redesigning supply chains on the fly.

Second, inventory strategies are undermined. Over the past decade, many industries have optimized toward leaner inventories, supported by reliable logistics and the availability of expedited shipping when needed. Dual-mode disruption exposes the fragility of this model. Safety stock assumptions become invalid when both replenishment speed and predictability deteriorate simultaneously.

Third, network effects amplify delays. Congestion, whether at ports or airports, is not linear. As capacity tightens, queues build, handling times increase, and knock-on effects cascade across networks. A delay in one node — say, a diverted vessel or a congested cargo hub — propagates across multiple supply chains, often in unpredictable ways.

Are we now seeing a decisive shift towards regionalisation and localisation of supply chains, or is globalisation simply evolving into a more fragmented model?

What is emerging is a reconfiguration of globalisation. Global trade is becoming more regionalised, more selective, and increasingly aligned with geopolitical and economic considerations.

We expect a further acceleration of strategies such as near-shoring and friend-shoring, as companies seek to reduce exposure to disruption and align with more stable or strategically aligned markets. This reflects a broader shift towards continuity and risk management as defining features of trade competitiveness.

As a result, globalisation is evolving into a more fragmented system, structured around regional corridors rather than a single, highly integrated global network.

From a business strategy standpoint, what does “resilience” actually look like today, and how are leading companies rethinking sourcing, inventory, and logistics networks?

Leading companies that rely on global logistics networks consider optionality, buffers, visibility and control.

They build structural optionality: Supply chains with ready-to-activate alternatives — multi-sourcing across regions, pre-arranged routes, and modal flexibility. Options must be executable within days, not theoretical.

They use inventory as a targeted buffer: Reintroduce inventory selectively: protect critical items, position stock closer to demand, and use semi-finished goods to absorb disruption where it matters most.

They enable real-time decisions: Move beyond basic tracking to integrated, forward-looking visibility with a control tower that can act quickly. Speed of decision-making is a key advantage in disruption.

They secure capacity: Shift from transactional buying to strategic access — diversified providers, long-term partnerships, and reserved capacity on critical lanes ensure availability under stress.

They prepare playbooks: Regularly simulate disruptions and define clear response plans. Alignment across teams enables fast, coordinated action when scenarios materialise.

They rebalance cost and resilience: Accept targeted cost and complexity increases as a strategic investment. A risk-adjusted approach protects continuity and drives outperformance in volatile conditions.

How should governments in the GCC respond to these shifts, particularly in terms of infrastructure, trade policy, and economic diversification?

The response should be a shift from isolated infrastructure development to fully integrated trade systems. While continued investment in ports, airports, and logistics assets remains essential, the priority is increasingly on interoperability across modes, borders, and stakeholders.

Trade policy also plays a critical role. The evolution towards “smart trade diplomacy” as described in our recent report reflects the need to align trade agreements, infrastructure, and digital systems into cohesive trade corridors that support both efficiency and resilience.

At a broader level, economic diversification will be central. Strengthening value-added logistics, industrial capacity, and regional supply chains will reduce reliance on transit trade alone and enhance the region’s competitiveness in a more fragmented global system.

What are the long-term economic and geopolitical implications if these disruptions persist, and which sectors are most exposed versus best positioned to adapt?

Sustained disruption is likely to accelerate the fragmentation of global trade, with long-term implications for economic growth, cost structures, and geopolitical alignment. In such a scenario, there will be greater emphasis on trusted corridors and aligned partnerships.

Sectors with high exposure to physical supply chains and limited flexibility, including energy, bulk commodities, and complex manufacturing, are likely to experience the most pronounced impact. Industries reliant on tightly synchronised supply chains are also vulnerable to prolonged disruption.

Conversely, sectors that are more adaptable, digitally enabled, or less dependent on linear supply chains are better positioned to respond. Logistics providers capable of offering integrated, multimodal solutions, alongside industries aligned with digital and sustainability-driven trade trends, are likely to gain a competitive advantage.

For the Middle East, the implications remain both a risk and an opportunity. If the current disruption translates into coordinated investment and enhanced integration, the region is well positioned to strengthen its role as a central and reliable node within the evolving global trade system.

Read: What the Hormuz crisis means for GCC markets in Q2 2026