As the U.S.-Iran conflict persists, shipping restrictions in the Strait of Hormuz are disrupting global trade, creating growing uncertainty for the global automotive industry and becoming a macroeconomic variable that tangibly impacts global auto sales, cost structures, and regional market dynamics. S&P Global Mobility has updated its preliminary 2026 forecasts for global light vehicle sales and production in a newly released rapid impact analysis.

As a vital global trade route, the Strait of Hormuz is currently under heightened tension, with commercial shipping restricted and traffic volumes well below pre-conflict levels. This has triggered a surge in global oil prices, supply disruptions, and unprecedented supply-demand tightness and price volatility in energy markets, severely impacting global economic activity.

▍Global Sales Forecast Downgraded

Gulf Cooperation Council (GCC) countries such as Saudi Arabia, the UAE, and Qatar rely heavily on maritime imports of vehicles. Shipping disruptions have caused vehicle shortages, extended waiting times, and reduced model availability. Meanwhile, war risk insurance premiums have skyrocketed, logistics costs have surged, new vehicle prices and inflationary pressures have risen in tandem, consumer confidence has weakened, and credit willingness has declined. S&P initially estimates that light vehicle sales in the GCC region could lose approximately 200,000 units in 2026.

If the strait remains closed through late April, the global market could face deeper supply chain disruptions. S&P's March forecast assumed tanker sailings would resume within weeks (by late March or early April), but this scenario has not materialized. The latest April draft assumes the strait will remain closed at least through late April, with shipping recovery being gradual and normalization potentially delayed until the second half of 2026. Under this baseline, S&P has downgraded its 2026 global light vehicle sales forecast by 800,000-900,000 units and its 2027 forecast by 500,000 units.

Additionally, if the strait remains closed through late April, Brent crude oil is expected to average $120 per barrel for the month, with daily fluctuations between $100-150. High oil prices will drive up energy inflation, further suppressing automotive affordability. While this will not create a long-term crisis, it is sufficient to make 2026 a year of extreme volatility.

▍Production Side: Highest Risks in Asia-Pacific

Compared to sales downgrades, production uncertainties are greater. S&P notes that due to ongoing production-related uncertainties, it cannot yet provide clear guidance on the scope and severity of automotive disruptions, but several risks have emerged:

The Asia-Pacific region faces the highest risks, as it depends on Middle Eastern energy imports while serving as the primary supplier to Middle Eastern and African (MEA) automotive markets. Lost MEA sales will directly impact exports from Japanese, South Korean, Chinese, and ASEAN automakers.

Heightened raw material concerns: Beyond oil, industrial materials transported through the strait—such as aluminum, methanol, and bromine—also face supply risks. Helium, essential for semiconductor manufacturing, remains unaffected so far, with chipmakers holding about six months of inventory. However, the longer the strait remains closed, the greater the risk of large-scale disruptions to the global automotive supply chain.

Production declines may exceed sales drops: S&P suggests that 2026 production declines could be more severe than those reflected in total sales, as production decisions are more sensitive to supply chain disruptions.

▍Commercial Vehicles: Greater Impact from Fuel Costs, Accelerated but Limited Electrification

Medium- and heavy-duty commercial vehicles (MHCVs) are more directly affected than passenger vehicles. Potential inflation and still-high (or rising) interest rates impact consumer spending, while soaring fuel costs disproportionately raise total cost of ownership (TCO) and operational expenses compared to consumer vehicles. S&P's MHCV team expects:

The U.S. market may see short-term "fuel switching," with some medium-duty truck buyers (particularly Class 4) shifting from diesel to gasoline. Class 8 heavy trucks may also downsize from larger diesel engines to smaller displacements. East Asian markets (including China) may accelerate transitions to electric commercial vehicles, as diesel prices surge alongside gasoline. However, in the U.S., even with higher oil prices, zero-emission trucks have not yet reached cost competitiveness, and high interest rates have raised borrowing costs for fleet operators, limiting capital expenditures.

S&P's next MHCV forecast will be released in May and is expected to further downgrade projections (March forecasts already reduced by 1%).

A relatively positive signal is that current global automotive inventory levels are sufficient to absorb short-term production declines. Thus, S&P emphasizes that this sales downgrade is primarily based on economic impacts (oil prices, inflation, consumer confidence) rather than direct production declines.

The risk lies in timing. If the strait blockade persists longer and inventories are depleted, supply chain fractures will translate into substantial production halts. The duration of the conflict remains the primary factor determining the extent of damage and recovery efforts.

For China's automotive industry, this conflict creates dual pressures: on one hand, the Middle East is an increasingly important market for Chinese brands going global; on the other, Asia-Pacific supply chain stability directly affects exports and component supplies. High oil prices may accelerate electrification in some markets, but inflation and weak consumer sentiment could suppress overall demand. The storm continues, and automakers can reassess inventories, diversify logistics routes, and prepare for longer-term oil price volatility.

Layout 丨 Zheng Li

Source 丨 S&P Global Mobility

Image Source 丨 Qianku.com