Dr Umair Choksy, Senior Lecturer in Management, University of Stirling Business School.
This week’s announcement of £53bn in aid to vulnerable households isn’t enough to curb rises in household costs, argues supply chain expert Umair Choksy.
The recent attacks by the United States and Israel on Iran has raised fears of a serious geopolitical shock in a region central to global energy markets.
Analysts have warned that prolonged conflict and sustained disruption around the Strait of Hormuz – the world’s most important oil shipping chokepoint – could generate widespread economic instability, pushing up energy prices and amplifying existing inflationary pressures across the global economy.
But these shocks do not stop at energy markets. Higher fuel costs quickly translate into higher shipping and freight costs, increasing the price of transporting goods and raw materials across global supply chains. Industries reliant on petrochemicals and natural gas – including fertiliser production, manufacturing and heavy industry – face rising input costs that can ripple through food systems and industrial production.
Energy analysts already describe the current crisis as one of the most significant supply disruptions global oil markets have faced in decades.
What does this mean for households in the UK? As we’ve seen from this week’s move to provide heating oil aid to the UK’s most vulnerable, there is potential for a huge knock-on effect. We import large quantities of energy, food and manufactured goods, which means global supply shocks quickly affect household costs. Research has shown that the UK’s persistent trade deficit makes household bills particularly sensitive to global price fluctuations because the country relies heavily on imported goods and energy inputs.
My research at the University of Stirling on global value chains suggests that resilience during crises tends to develop in two stages: robustness and responsiveness. The UK must prioritise its policies to account for both.
First, we must strengthen the robustness that allows the UK energy system to absorb supply shocks. Strategic reserves and storage capacity play a central role because they slow the transmission of global energy shocks into domestic markets. Countries such as Japan maintain extensive oil reserves precisely to cushion supply disruptions.
The UK already participates in the International Energy Agency’s emergency oil stockholding system and maintains diversified import routes through pipelines from Norway and liquefied natural gas terminals.
However, policy assessments also highlight that the UK’s limited gas storage capacity and reliance on global LNG markets can leave it exposed during crises. Strengthening these existing buffers – through storage capacity – would improve the UK’s ability to absorb sudden disruptions when geopolitical conflicts escalate.
Second, the UK must accelerate efforts to build responsiveness and reduce exposure to vulnerable global energy routes. Even though the UK imports relatively limited volumes of energy directly from the Gulf region, global energy markets are tightly interconnected. So reducing dependence on globally exposed fossil fuel supply chains is key.
Expanding renewable energy generation, strengthening grid flexibility and investing in energy storage can help. We need to make sure that the transition to renewable energy is not only a climate policy but also a strategy for strengthening economic resilience against geopolitical disruptions.
Third, UK policies must minimise the unequal burden that global shocks place on households. When energy prices surge, the effects quickly spread through electricity bills, transport costs and food prices, placing disproportionate pressure on lower-income households whose spending is concentrated on essential goods.
In the past, the UK relied on broad interventions such as the Energy Price Guarantee to shield consumers during energy crises. While these measures helped stabilise household bills and maintain consumer confidence, they were also extremely costly because they applied support across the entire population rather than focusing on those most exposed.
This week’s government announcement of a £53m heating oil support package signals a shift toward targeted support for vulnerable households. This approach is more efficient and better aligned with protecting those most affected by rising energy prices. However, household support alone cannot solve the underlying problem.
Financial assistance helps cushion the immediate shock, but it does not reduce the structural vulnerability that allows global crises to push up domestic energy costs in the first place. That is why targeted support needs to work alongside broader resilience measures — including stronger energy reserves and storage capacity, as well as efforts to reduce dependence on geopolitically exposed fossil fuel supply chains.
As global tensions rise and supply chains become increasingly exposed to geopolitical risk, resilience will depend on how well countries can absorb shocks, adapt their supply systems and protect households from sudden price surges.
The countries that treat resilience as a core economic strategy rather than a temporary emergency response will be far better placed to manage the geopolitical disruptions that are likely to define the coming decade.