Q4 2026 Outlook: Where the disruption lands.

In June, it looked as though the worst might be over. An interim US-Iran deal promised to reopen the Strait of Hormuz, and commodity markets began to price out the war premium. That deal lapsed in mid-August. By early September, strikes around the strait had intensified, and Houthi attacks were blocking Saudi oil exports through Bab el-Mandab. Our outlook now judges that full restoration of Middle East oil flows is unlikely before mid-2027.

That makes the final quarter of 2026 a test of resilience rather than recovery. The costs of rerouting, fuel and scarce inputs are no longer a shock, they are the operating environment. What matters now is how they travel through supply chains, and who ends up paying. We have tracked that journey across four sectors.

Shipping

Most Asia-Europe container services still sail around the Cape of Good Hope, adding days or weeks to each voyage. Yet the market underneath is oversupplied. Global container trade is forecast to grow 3.8% this year while fleet capacity grows 4.6% and the container orderbook now exceeds 14 million TEU.

The long way round is soaking up that surplus. If the Red Sea reopens, the capacity comes back at once, and container rates are forecast to fall by around a third over the coming years. For shippers, the risk in Q4 runs both ways, a sudden escalation, or a sudden peace.

Import & Export

The UK's trade figures have so far absorbed the shock. The goods deficit narrowed slightly to £61.6 billion in the three months to July, and non-EU imports rose 4.7% over the same period. Headline stability hides rising costs per shipment, longer voyages, higher fuel and slower port turnaround all land on importers' margins before they show up in prices.

Food: Grain, Seed & Oil

For food, the war's main channel is the farm, not the supermarket. The Gulf is a major source of fertiliser, and its price follows the strait. When Hormuz flows improved in June, urea prices fell by a third in a month, but phosphate supply was expected to stay tight into Q4.

An OECD scenario cited in the same report puts average agricultural prices 4.5% higher in 2026 and 8.3% higher in 2027, with the effect arriving late.

That delay is the point. Fertiliser bought this autumn shapes next year's harvest, and a strong El Niño, given an 84% chance for September to November, adds weather risk on top.

Manufacturing

UK factories are still growing, but more slowly and at higher cost. The manufacturing PMI read 51.9 in September, an eleventh month of expansion, but output growth was the weakest in six months. Input cost inflation picked up for the first time in four months, delivery times lengthened sharply, and energy and electronics prices remain especially elevated. With the Budget due this autumn, confidence is still below where it stood before the war.

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