Which Business Sectors Are Hit by the New Crisis in the Middle East?

The resurgence of tension in the Middle East, fueled by the conflict between Israel and Iran and threats to critical maritime passages, is creating a new wave of geo-economic instability and uncertainty for businesses. For Greece, where many enterprises depend on the smooth flow of energy and goods through these Middle Eastern routes, the impacts are direct and multi-layered. Critical sectors of the economy are entering a pressure zone, with smaller businesses being the most vulnerable. The shipping industry faces the most immediate consequences. Despite higher freight rates bolstering the Greek shipping fleet, increased insurance costs and longer sailing times due to forced rerouting burden operations. Avoiding the Red Sea raises operational costs, especially for companies transporting cargo between Asia and Europe. For smaller players without flexible fleets or capital ease, the new reality raises serious sustainability questions. Another crucial factor is the spike in oil prices, which poses a significant risk of energy suffocation for businesses. Sectors such as industry, transportation, tourism, and agri-food see their costs significantly increasing. If adverse scenarios materialize and Brent crude stabilizes above $100–110 per barrel, the impact on liquidity and competitiveness for small and medium-sized enterprises is expected to be intense. Tourism also finds itself in the eye of the storm, a concern voiced during the recent emergency KYSEA meeting. Greece’s geographical proximity to the war-torn region may categorize it, particularly in the eyes of travelers from the U.S., Asia, or Australia, as part of a broader ‘zone of instability.’ This could lead to immediate and multifaceted effects, including cancellations of organized cruises that typically visit Greek ports alongside those in Israel, Turkey, and Egypt, creating a domino effect of cancellations even for Greek destinations. Risks include increased travel insurance costs and insurance policies for both tourists and international tourist businesses, reducing demand and competitiveness. Larger industrial and manufacturing enterprises will also suffer significant blows. Greek industries heavily rely on imported raw materials and energy. With maritime traffic disrupted, delays and up to 40% increases in transportation costs are already observed, pushing businesses toward alternative but more expensive options or even production halts. Final product prices are expected to rise, burdening consumption and reducing competitiveness. The next link in the chain is commercial enterprises, especially small and medium-sized ones, facing dual challenges: rising procurement costs and declining demand due to price hikes. Those without sufficient inventory or strong profit margins risk running out of stock or having unsellable products. The lack of liquidity makes adapting to the new conditions difficult, intensifying the risk of closures.