Tensions in the Middle East have always carried global implications, but few pressure points are more critical than the Strait of Hormuz. This narrow passage off the coast of Iran is the transit route for around one-fifth of the world’s oil and a quarter of its liquefied natural gas (LNG). A closure, even temporary, would trigger a global economic ripple. For the UK, the consequences would be serious, with sharp effects on energy costs, inflation, and supply chains.

The likely impact on the UK economy

Although the UK does not buy a large share of oil or gas directly from the Gulf, global energy markets are extremely sensitive. A disruption in supply from the region would cause oil and gas prices to surge on international markets. That would feed through to UK fuel prices, electricity generation costs, and ultimately to the cost of goods and services.

Households would feel the pinch at the petrol pump and through higher heating bills. Businesses would face increased production and transport costs. Sectors such as food, manufacturing, and logistics, all of which rely on energy-intensive processes or imported inputs, could see margins squeezed or operations disrupted.

With inflation already proving stubborn, a sudden energy price shock could reverse recent progress and prompt the Bank of England to hold or even increase interest rates. That would add to borrowing costs, slow consumer spending, and potentially delay investment decisions by UK firms.

How UK businesses can respond now

While the exact course of events cannot be predicted, businesses can take practical steps now to reduce their exposure to external shocks like this one.

1. Review and diversify supply chains
   Look for alternatives to suppliers or routes that may be affected by increased shipping costs or delays. Building in more resilience can help ensure continuity.
2. Lock in energy contracts
   Businesses should explore fixed-price energy contracts or forward purchasing arrangements where possible. This can cap exposure to sudden cost spikes.
3. Build working capital reserves
   Improving cash flow and keeping a buffer in reserve will help businesses weather a temporary period of higher costs or slower trading.
4. Increase pricing flexibility
   Firms should assess where modest price rises might be accepted by customers if energy-related costs go up and have plans ready.
5. Monitor geopolitical and market signals
   Keeping informed of developments in the region and commodity markets allows for quicker reactions and better-informed decisions.

Conclusion

The UK may not be on the frontline of Middle Eastern tensions, but it is firmly within the economic blast radius of any disruption to global energy flows. With risks like a Strait of Hormuz closure hard to predict but potentially severe, sensible preparation is not alarmist, it is strategic. Businesses that plan ahead are more likely to stay resilient, competitive, and in control, whatever the headlines bring.

For many business owners, the daily focus is on growth, sales, staff, and operations. Planning an exit often sits far down the priority list, something to deal with “one day.” However, failing to plan for how and when you will eventually leave your business can result in missed opportunities, lost value, and unnecessary stress. Whether you plan to sell, pass the business to family, or simply wind it down, an exit plan is essential.

Protecting and realising value

Your business is likely one of your most valuable assets. Without a clear exit strategy, it can be difficult to extract its full value when the time comes to leave. A good plan will help you tidy up financial records, secure long-term contracts, strengthen leadership, and ensure systems are in place that make the business more attractive to buyers or successors.

Exit planning can also highlight areas where value is currently locked in, for example, if too much of the business depends on you personally. By addressing these issues early, you make the business more stable and reduce risk for future owners.

Avoiding disruption and stress

Unexpected life events such as illness, family changes, or economic shifts can quickly bring about the need to exit the business. If you are unprepared, this can lead to hurried decisions, disputes, or financial shortfalls. A well-considered plan helps you stay in control, even if circumstances change suddenly.

It also protects employees, customers, and suppliers. Knowing there is a continuity plan in place builds confidence and ensures that the business can continue running smoothly during a transition.

Tax and legal efficiency

Leaving a business has tax consequences, whether through Capital Gains Tax, Inheritance Tax, or income withdrawals. Exit planning gives time to structure the business in a tax-efficient way, perhaps by using Business Asset Disposal Relief, family trusts, or share restructures. Legal aspects such as shareholder agreements, wills, and powers of attorney should also be reviewed and aligned with your plans.

Without forward planning, you may face higher tax bills or delays in transferring ownership.

Clarity of purpose and timing

Even if you love what you do, there will come a time when you want to slow down or move on. Setting a clear goal and timeframe helps guide business decisions. For example, if you want to sell in five years, you might focus on building recurring income, diversifying your customer base, or reducing reliance on key individuals.

It also helps family members or co-owners understand your intentions. This avoids conflict later and allows others to plan their own roles accordingly.

Conclusion

Exit planning is not just about leaving, it is about shaping the future of your business and ensuring that the rewards of your hard work are protected. By starting early, you give yourself time to increase value, reduce risk, and leave on your own terms. A professional adviser can help you map out the right strategy and keep it under regular review. The best exits are planned, not improvised.