Iran War Threatens Key Auto Supply Chain Materials, Analysts Warn

The war in Iran has become another hit to an automotive industry already strained by tariffs, a second microchip shortage, and years of cascading supply disruptions, this time raising concerns about access to oil, plastics, and aluminum critical to vehicle production.

As CNBC Reports, about 20% of the world's oil comes through the Strait of Hormuz, a shipping watrway bordered by Iran and Oman, according to the U.S. Energy Information Administration. Oil prices surged above $100 a barrel Monday. Gas prices have risen 12 cents nationwide on two separate days in the past two weeks—among the largest single-day increases since 2005, according to GasBuddy.

"I think it's the pace of the increases this week that's really catching Americans off guard, and that might be making them feel a little bit nauseous about the prospect of driving, getting out, road trips," said Patrick De Haan, an analyst at GasBuddy.

Higher oil costs threaten to raise the price of petrochemicals used to make plastic, which comprises roughly 30% of a vehicle's parts. The Gulf region also accounts for 9% of global aluminum smelting, a material increasingly vital to automakers pursuing lightweighting strategies for both combustion and electric vehicles. The U.S. imports 80% to 90% of its aluminum, with about 20% sourced from the Gulf.

Dan Hearsch, managing director at AlixPartners, warned the disruptions reflect a deeper, structural problem for the industry.

"These things are continually disruptive," Hearsch said. "There's no silver bullet for predicting or dealing with all of these crises."

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