Q COSTARICA — Even though the latest global conflict is happening halfway across the world, Costa Rica can’t just sit this one out. The oil market, how closely connected the global economy is, and who’s involved all mean that what happens in Iran and its neighbors could hit Costa Rica, too.
Experts and business leaders say the impact depends a lot on how long this conflict goes on. But they’re focused on three main worries: oil, logistics, and supply chains.
The Costa Rican Chamber of Foreign Trade (Crecex) highlights four major concerns about how the Middle East crisis might affect the country’s productivity:
- Rising fuel and local costs: As oil prices climb internationally, the cost of imported fuels could follow. That drives up transportation, distribution, and production expenses, which could push inflation higher.
- Higher shipping fees: Shipping companies might add risk surcharges and fuel cost adjustments. This makes importing raw materials and exporting Costa Rican goods more expensive.
- Pressure on key industries: Sectors like manufacturing, agriculture, construction, and those relying heavily on energy or logistics could face bigger bills for inputs like chemicals, packaging, and petrochemical products.
- More supply chain chaos: When a critical energy trade hub is disrupted, supply routes get rerouted, causing ripple effects at ports and transport corridors worldwide.
Oil and its byproducts on the rise
Because the Middle East plays a huge role in oil and energy, the world keeps a close watch on crude oil and derivative prices. These price shifts affect countless industries.
Daniel Suchar, an analyst, says, “Everything points to oil prices going up, meaning petroleum products will likely get more expensive over the next two months.”
He adds that gasoline and fuel prices in Costa Rica could start rising around April and May.
Suchar also warns that other sectors won’t be spared. Fertilizers and agrochemicals, vital for farming, could see price hikes too. Plus, petroleum-based goods like plastics, sulfur, and asphalt might take a bit longer to catch up but will also eventually push inflation higher worldwide.
The Strait of Hormuz’s location makes it a critical chokepoint if tensions escalate in the Middle East.
More time, more trouble
How bad things get really depends on how long and how intense the conflict becomes.
Carlos Cascante, a university analyst, says, “It’s too soon to tell the full impact because we don’t yet know how far the US and Israel’s actions will go.”
He points out that if the conflict spreads, the effects will be more severe.
Oil prices will likely spike if the Strait of Hormuz closes off, since supply can’t be guaranteed. Plus, moving other goods gets complicated by the warzone, which raises shipping and insurance costs—these costs quickly show up in prices.
Cascante also notes that uncertainty rattles stock markets, making investors cautious. Economic activity often slows as businesses wait to see how things will play out before making big moves.
How can companies protect themselves?
With so much uncertainty, Crecex suggests businesses take these steps:
- Check logistics contracts for war risk, fuel surcharges, or route changes.
- Take stock of critical supplies and build up safety inventories where possible.
- Diversify suppliers and shipping routes if the business setup allows.
- Adjust prices to reflect potential rises in shipping and energy costs.
- Keep in close touch with freight forwarders and carriers to stay on top of any operational shifts.
Costa Rica can’t ignore what’s happening in the Middle East, and businesses need to plan carefully for whatever comes next.