When US and Israeli forces struck Iran on February 28, attention quickly turned to the Strait of Hormuz. Within hours, Iran’s Islamic Revolutionary Guard Corps declared the waterway unsafe for commercial passage; by nightfall, vessel traffic had fallen by roughly 70%.
The Hormuz closure threatens to compound pressures that were already mounting across the fashion industry: freight surges layered on top of unresolved tariff costs, a volatile trade policy environment, and the lingering impact of two years of disruption in the Red Sea shipping corridor. The escalation arrives just weeks after a new US-India trade framework promised to reshape sourcing economics, highlighting how quickly geopolitical shocks can redraw the industry’s strategic assumptions.
Approximately 20 million barrels of oil — around 20% of the world’s liquid petroleum — pass through the Strait of Hormuz daily. It is also a key outbound route for goods manufactured in Bangladesh, India, Pakistan, and Sri Lanka — key fashion manufacturing countries — now sitting at the confluence of two disruption corridors simultaneously compromised for the first time.
Now, fashion brands are confronting a simultaneous shock to supply chains, energy markets, consumer confidence, and luxury demand — raising questions about whether an industry that has absorbed five major disruptions in five years has meaningfully changed how it manages risk.
Who hurts most
Dr. Sheng Lu, director of fashion and apparel studies at the University of Delaware, has mapped the EU export dependency of the world’s major apparel sourcing countries.
Over 75% of Europe’s apparel imports from Asia typically pass through the Red Sea corridor. Türkiye, Bangladesh, and Pakistan are the most acutely exposed sourcing countries.
Shipment-level data from ImportGenius adds granular detail. Brands sourcing from Jordan, normally exporting via the Port of Haifa in Israel, are attempting to reroute through an overwhelmed Port of Aqaba. The Port of Salalah in Oman — a critical transshipment hub for garments from JCPenney, Banana Republic, Gap, Old Navy, and Levi’s — is also entangled in the conflict, leading to higher insurance and fuel costs in the area. Oil storage facilities at the port were struck by drones on March 11, after attacks the week prior, hitting fuel tanks at the terminal and prompting some carriers to pause local operations. While no merchant vessels were reported damaged, the strike underscores how quickly logistics infrastructure in the Gulf is becoming part of the conflict’s operational perimeter.
For fashion supply chains that rely on the port as a staging point for cargo moving between South Asia, Europe, and the United States, the implications are immediate.
Records show Old Navy and Gap as the dominant US importers through the Pakistan-Salalah corridor — Old Navy alone accounts for more than 2,300 recorded shipments — with Levi's, Walmart, and Banana Republic also significantly exposed.
Traffic through the region has already thinned dramatically. According to Everstream Analyticss, daily vessel calls at key Gulf hubs including Bandar Abbas (Iran), Jebel Ali (UAE), and Salalah (Oman) have fallen by more than 50% since early March, as carriers adopt a wait-and-see approach or divert cargo to alternate ports.
Risk exposure is driven less by company size than by sourcing geography — and the compounding effect is acute, notes Steve Lamar, CEO of the American Apparel and Footwear Association (AAFA).
“Apparel, footwear, and travel goods are low-margin products, meaning increases in transportation costs can significantly impact companies’ bottom lines,” he says, “especially as the industry is already managing new Section 122 tariffs while still awaiting refunds from the illegally collectsed IEEPA tariffs.”
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Myanmar introduces a further layer of complexity: junta-imposed fuel restrictions are disrupting upstream production for brands still heavily reliant on the country’s garment zones. Adidas emerges as the largest named US importer from Myanmar ports, per ImportGenius data, ahead of H&M, L.L.Bean, and Cutter & Buck — all of whom had shipments moving through Yangon, the country’s largest city, in early March. H&M, which continues to source a small portion of garments from Myanmar but is in the process of phasing out production there entirely, says it is monitoring developments but that it is too early to assess potential supply-chain impacts. Adidas says its sourcing operations are not currently affected, noting that Myanmar accounts for less than 1% of its global sourcing volume and that its manufacturing partners in the country remain operational.
“If the Strait of Hormuz remains closed, it’s very possible we’ll see production cuts there as well,” says ImportGenius lead analyst Lynn Hughes.
The geography of risk
In addition to the physical threat to vessels, electronic interference is compounding disruption. Mirko Woitzik, head of product, supply chain risk management at Everstream Analyticss, says widespread GPS and Automatic Identification System (AIS) interference has been detected across the Arabian Gulf and the Strait of Hormuz, disrupting vessel navigation and traffic management.
The Red Sea, blocked by Houthi attacks since late 2023, had already forced vessels onto the longer Cape of Good Hope reroute. But the disruption is not hitting fashion uniformly — and the asymmetry matters.
The Trans-Pacific, Asia-to-North America passage, has been largely unaffected beyond fuel surcharges. The real pain is concentrated on two vectors: Asia-to-Europe air freight, and any cargo moving into the Gulf states themselves.
The Red Sea approach to the Suez Canal has effectively been closed to commercial shipping since 2023, when Houthi attacks forced vessels onto the longer Cape of Good Hope reroute. Most European-bound ocean cargo was already absorbings that detour before the Hormuz closure — so in that sense, the latest strait disruption has not lengthened those journeys further, says Sanne Manders, president of Flexport. Ships are simply continuing the Cape reroute, cutting out the Gulf rather than adding to it.
The disruption extends beyond ocean lanes. Emirates and Qatar Airways collectsively rank among the five largest air freight carriers globally, and handle a disproportionate share of Asia-Europe belly cargo, given how landing rights concentrate traffic throughout Gulf hubs. Both suspended or severely curtailed operations following the February 28 strikes. “The capacity is very limited,” says Manders.
Emirates SkyCargo has since begun a phased restoration of services following a partial airspace reopening, accepting bookings on passenger and freighter flights subject to capacity, with onward connectivity through Dubai confirmed where flights are operational. Qatar Airways Cargo remains a different matter: scheduled operations are fully suspended pending an official reopening of Qatari airspace, with only a handful of freighters operating outside Doha.
The result is a rate environment that is moving fast. Spot pricing — the price shippers pay to move cargo on the open market, as opposed to longer-term contracted rates — on Asia-Europe lanes has risen by some $1 to $4 per kilogram, on top of a baseline of around $3.50 to $4. Though Manders cautions that the lower end of that range is the more reliable signal. The more acute concern is jet fuel, repriced each week, which means the rate picture can shift before cargo even departs. “If prices keep on rising,” Manders says, “I would just assume that more and more shippers will start opting out of air freight.”
Early data from Xeneta, a freight market intelligence platform, quantifies the disruption some ocean shippers are experiencing. Spot rates from China to Salalah are up 28% from pre-conflict levels, while China to the UK is up 9%. For brands that locked in rates before the conflict, the immediate hit is cushioned, but those contracts expire, and the spot market is where the new baseline is set.
More significantly, Xeneta’s chief analyst Peter Sand doesn’t expect a full return to Red Sea transit this year — the revised assessment is normalization by mid-2027. Fashion brands are not managing a temporary disruption with a foreseeable end date, they are managing a structural rerouting compounded by a Hormuz closure whose duration remains genuinely unknown.
The India whiplash
Of all the collateral damage inflicted by the Hormuz closure, none is more poorly timed than its impact on India.
In less than a month, the country went from celebrating what its apparel industry described as the trade deal of a generation to confronting a logistical reality that could blunt much of its advantage.
The India-EU free-trade agreement was signed on January 27. An interim trade framework with the US followed on February 3, giving Indian apparel a meaningful tariff edge over regional competitors including Bangladesh and Vietnam. For brands reassessing their sourcing strategies after a year of tariff turbulence, the deals briefly suggested that India’s position in global supply chains might strengthen quickly. Then came the attacks.
India’s standard export route runs through the Arabian Sea and into the Red Sea, meaning shipments now face disruption across two compromised corridors simultaneously. With vessels avoiding both the Strait of Hormuz and the Red Sea route, many shipments are being diverted around the Cape of Good Hope, adding roughly 15 to 20 days to transit times. For a sourcing model built around narrow seasonal delivery windows, those delays matter. The longer routes also introduce a freight premium that risks eroding the tariff advantage Indian exporters had only just secured.
In practice, however, the industry’s focus has shifted from strategic implications to immediate operational concerns, says Sand. For many brands and logistics teams, the priority is simply understanding where shipments currently sit in the network and what alternatives exist.
The synthetic trap
The crisis reaches further upstream than freight rates. Polyester and nylon are petroleum derivatives — crude price volatility transmits directly into feedstock costs before a single container moves. For fast fashion and sportswear, the most polyester-intensive segments, the Hormuz closure is touching input costs and transit routes at once. Brands heavily dependent on synthetic fibers and sourcing from factories reliant on Gulf petrochemical supply chains face a structural double-exposure, not a temporary freight surcharge, Rita McGrath, professor of management at Columbia Business School, notes — and one that persists regardless of how quickly shipping resumes.
Dr. Lu’s analysis adds a pricing dimension: because demand for categories like women’s dresses is more price-sensitive than wardrobe essentials or childrenswear, brands will find it hardest to pass input cost increases through at retail precisely where synthetic-fiber dependency is highest. The strategic case for reducing polyester reliance, says McGrath — long framed as an ESG priority — is now also a supply chain resilience argument, and one that this disruption makes harder to defer.
The recession shadow
Perhaps the biggest macro risk stemming from the Iran conflict is the possibility of triggering a worldwide economic slowdown.
“A prolonged closure of the Strait of Hormuz is a guaranteed global recession,” Bob McNally, founder of Rapidan Energy and a former White House energy advisor, told CNBC in the immediate aftermath of the first strikes.
Oil breached $100 per barrel in the days following the strikes, briefly retreated, and has since climbed back above that threshold — a volatility pattern that itself carries operational consequences.
For fashion, the transmission is layered: rising crude increases the cost of polyester and nylon before a stitch is made, freight surges compound existing tariff burdens, and eroding consumer confidence weighs on discretionary spending. Apparel’s share of US personal spending has already fallen from 2.23% in 2021 to 2.08% in 2025, before any recession is priced in, says Dr. Lu, citing Bureau of Economic Analysis data.
Freight costs alone are unlikely to be the breaking point, Manders notes — doubling per-item ocean rates, from roughly 25 cents to 50 cents for a pair of shoes, is a different order of magnitude from 30% tariffs on a $20 bill of materials. “I don’t think doubling freight rates will put anyone out of business,” he says. The existential risk is the combination of all three pressures, not any single one in isolation.
The inflection point
The fashion industry has now absorbed five major supply chain shocks in five years.
Each time, the industry has invoked resilience and largely returned to the same sourcing geography, the same modal dependencies, and the same chokepoint exposures. The gap between declared strategy and operational reality is measurable: despite years of industry pledges to diversify, the Western Hemisphere’s share of US apparel imports has continued to shrink.
Nearshore apparel exports to the US were down 6.7% from CAFTA-DR nations and 0.8% from Mexico in 2025, despite preferential tariff rates, according to Dr. Lu. The policy environment offers no respite: on March 11 , the US Trade Representative announced Section 301 investigations into structural excess capacity across 16 economies — a list that includes Bangladesh, Vietnam, Cambodia, Indonesia, India, China, and Mexico. No tariff action has been taken yet, but the investigations signal that the current tariff architecture may not be the ceiling.
Given the trade complexity facing brands, what is needed, says McGrath, is not resilience but continuous reconfiguration — building organizations that operate across a permanently wide range of conditions, rather than recovering from deviations from a norm.
It requires pre-authorized decision trees that allow operational response in hours, not days; working capital structured for disruption rather than optimized for lean; and a fundamentally different relationship with uncertainty.
“The key diagnostic is whether the disruption reveals a latent structural vulnerability, or merely imposes a temporary cost,” McGrath says. “A brand whose Asia-to-Europe supply chain must now navigate both a closed Hormuz and a hostile Red Sea has compounding chokepoint exposure. That’s not a freight problem to absorb — that’s a network architecture problem.”
McGrath offers an unsparing verdict on the industry’s unending cycle of disruption. “Resilience is the wrong frame because it implies returning to a prior stable state,” she says. “There is no prior stable state to return to.”
Update: This article was updated to include comments from H&M and Adidas. (March 16, 2026)
