Escalating tensions in the Middle East could begin to affect the availability of medicine in Australia, according to supply chain expert Steve Blough (pictured), who says the instability around the Strait of Hormuz risks disrupting pharmaceutical supply chains.
“Escalating tensions around the Strait of Hormuz have the potential to disrupt pharmaceutical supply chains that Australia depends on, even though the conflict itself is occurring thousands of kilometres away,” says Mr Blough, Chief Supply Chain Strategist at Infios.
Pharmaceutical industry relies on global network
While Australia relies heavily on generic medicines produced in India, Mr Blough notes that “the supply chain that feeds those factories is global”.
“Modern drug manufacturing relies on a highly interconnected network of suppliers, logistics hubs and transport corridors, and the Gulf region sits at the centre of several of those flows,” he says.
“Many of the chemical precursors and active pharmaceutical ingredients originate in China and are frequently routed through major distribution centres in the Gulf, including hubs in Dubai and across the United Arab Emirates, before reaching Indian manufacturers.
“Even when materials move directly between Asia’s manufacturing centres, the pharmaceutical sector still relies heavily on petrochemical feedstocks and energy supplies sourced from the Gulf region.”
Cold-chain risks
Mr Blough notes risks to both air and sea freight, particularly for temperature-sensitive medicines.
“Beyond production inputs, the Middle East also functions as a major transit corridor for pharmaceutical cargo,” he says.
“High-value or time-sensitive medicines often move by air through Gulf aviation hubs, while bulk shipments travel by sea in refrigerated containers that must maintain precise temperature conditions throughout the journey.”
Mr Blough explains that while “air cargo typically uses insulated packaging systems […] many shipments still rely on insulated packaging that requires dry ice or battery-powered cooling systems” that need to be recharged “periodically during transit”.
“Refrigerated containers — known as ‘reefers’ — operate within tightly planned sailing schedules and rely on consistent electrical power at ports and transhipment hubs to maintain internal temperatures,” he says.Â
“If vessels are forced to divert away from conflict zones or if sailings are cancelled, containers can accumulate at origin ports while others are redirected to alternate hubs that may not have sufficient power capacity to support large volumes of refrigerated cargo.
“At the same time, empty containers can become trapped in affected regions. When that happens, equipment cannot return to Asian export hubs where new pharmaceutical shipments are waiting to be loaded.
“This creates a compounding logistics challenge: manufacturers may have product ready to ship but lack the specialised containers required to move it.”Â
‘Early signs of strain already visible’
All of this, says Mr Blough, “can cascade through the pharmaceutical supply chain” and “early signs of strain are already visible in freight markets”.
“Air cargo rates from India have reportedly increased sharply, in some cases rising by 200 to 350 per cent as shippers compete for limited capacity,” he says.
“When transport costs rise this quickly, the effects often filter through supply chains faster than many people expect.”Â
Mr Blough notes that the “pharmaceutical sector is particularly sensitive to logistics disruptions”.
“Many wholesalers and pharmacies operate with relatively lean inventories of generic medicines,” he says.Â
“This just-in-time approach helps manage costs but leaves little buffer when global transport networks are disrupted.”
‘Effects could be seen in weeks’
Concerningly, Mr Blough notes that if the conflict and instability around Gulf shipping routes continue, we could start seeing the effects “within 4 to 6 weeks”.
“Supply pressure may first appear in high-volume generic medicines, including treatments for diabetes, hypertension and cholesterol, as well as antibiotics,” he says.
“Certain temperature-sensitive therapies, including some oncology treatments, could also face delays if refrigerated transport capacity becomes constrained.
“For Australia, the key issue is not necessarily a sudden halt in medicine production, but the vulnerability of the logistics systems that connect manufacturers with global healthcare markets.
“When shipping routes lengthen, containers are delayed, and air freight capacity tightens, medicines can take longer and cost more to reach pharmacies and hospitals.”
