GMGT 5313 International Business Final Assessment 2026 | UniRazak

GMGT5313 Final Assessment

Section A (50 marks)

Question 1 until Question 3 are based from the news clipping study below. 

Answer ALL questions.

Supply Chain Disruption and the Ripple Effect in Global Energy Markets

On 28 February 2026, the United States and Israel launched a joint military operation, Operation Epic Fury, against Iran. The situation escalated rapidly following the death of Iran’s Supreme Leader, Ali Khamenei, triggering full-scale retaliatory attacks by Iran and resulting in the de facto closure of the strategically critical Strait of Hormuz.

The Strait of Hormuz is a vital global energy corridor through which nearly 20% of the world’s oil and gas supply flows. Its disruption immediately created a systemic shock affecting global energy markets, maritime logistics, and financial systems. As the strait was designated a high-risk zone, maritime insurance premiums surged significantly. War-risk premiums alone increased costs by an estimated USD 5 to 15 per barrel. Major energy companies such as QatarEnergy, BAPCO, and Kuwait Petroleum Corporation declared force majeure, forcing shipping companies to reroute vessels and absorb higher operational costs.

The disruption disproportionately affected East and Southeast Asia due to their heavy dependence on

Middle Eastern energy supplies. According to the World Economic Forum, countries such as South Korea, Japan, China, and India account for approximately 75% of crude oil and 59% of liquefied natural gas imports passing through the strait. Shipping routes became longer and more congested as vessels avoided high-risk zones. According to Reuters, declining vessel traffic and increased detours intensified port congestion, creating a cascading effect across global supply chains.

Within five days of the conflict, ASEAN foreign ministers issued a joint statement calling for an immediate ceasefire. Under the leadership of the Association of Southeast Asian Nations, member states expressed concern over rising energy prices and economic instability. National responses varied: Indonesia signaled mediation efforts, Malaysia condemned the escalation, while Singapore and Vietnam emphasized neutrality and international law. Meanwhile, Thailand and the Philippines focused on the safety of their nationals in the Middle East.

The crisis highlights the Strait of Hormuz as not merely a regional chokepoint, but a critical vulnerability in the global supply chain system. Without swift diplomatic intervention, the disruption risks evolving into a prolonged structural crisis affecting global trade and economic stability.

Question 1

Explain the concept of the ripple effect in supply chain management. Based on the case, identify and briefly describe TWO (2) examples of ripple effects triggered by the disruption in the Strait of Hormuz.

(10 marks)

Question 2

Based on the case and your own research, analyse the impact of this disruption on the global energy supply chain, and identify which industries are most affected.

Answer

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