Supply Chain Relationships in Oil Shipping from the Middle East under Geopolitical Risks

Abstract

This paper discusses how geopolitical risk transforms supply chain relationships within Middle Eastern oil-shipping networks; it is through the way of governance structures, coordination mechanisms and resilience in the face of chronic instability. The study reviews the secondary empirical data, industry reports, and scholarly literature, to examine the ways in which companies cope with the uncertainty within the interconnected oil and maritime freight markets using a qualitative, case-informed approach. The evaluation is based on the theory of supply chain relationship and risk governance, which enables a cohesive evaluation of the relationship coordination, the contractual system, and the adjustment of operations. The results demonstrate that geopolitical risk is more of a structural condition than a perturbation, and it increases the interdependence of supply chain actors. Long term relationships, flexible contracting and information exchange mechanisms are proven to increase adaptive capacity, whereas pure transactional arrangements are more susceptible to inflated costs, delays and transmission of volatility. The paper also finds asymmetric adjustment processes, i.e., risk premiums, insurance limits, and rerouting choices that remain even when geopolitical tensions pressure is reduced. Although the use of secondary data restricts the aspect of generalisability, the results offer a strong conceptual basis for the upcoming empirical studies to be conducted on the primary data and comparative analysis of the regions. In practice, the findings indicate that oil-shipping companies and logistics stakeholders are advised to focus on strategic cooperation, diversified routing policy, as well as combined risk planning to maintain the continuity of operation. On a social dimension, enhanced resilience in oil shipping supply lines offers energy security in the world, market stability and the economy at large. The article presents a new value, as it puts geopolitical risk into a relational supply chain perspective, which can be applicable to researchers and professionals working in the industry.