15,000 additional corporate insolvencies are now the projected cost of the ongoing conflict in the Middle East over the next two years, according to an urgent risk assessment from Allianz Trade. This figure represents a significant escalation in the insurer’s outlook, directly tied to the fallout from the military campaign launched by the US–Israel coalition on 28 February. By following the money through global supply chains, it becomes clear that the closure of the Strait of Hormuz has transformed a regional military standoff into a systemic threat to global business solvency.
The Cost of a Disrupted Chokepoint
The math underpinning this surge is rooted in the strategic importance of the Strait of Hormuz, which facilitates the movement of approximately 20% of global oil consumption and 20% of liquefied natural gas trade, according to data from the US Energy Information Administration. When that artery experiences volatility, the shockwaves are immediate and expensive. Aylin Somersan Coqui, chief executive of Allianz Trade, notes that these costs are currently permeating every corner of the global value chain, from manufacturing and technology to healthcare and agrifood.
The latest projections mark a sharp departure from the firm’s October 2025 outlook. At that time, the forecast anticipated a 5% rise in business failures for 2026 and a 1% dip in 2027. Now, the insurer expects a 6% increase in 2026—marking the fifth consecutive year of rising failures—before the numbers plateau at these elevated levels in 2027. This revision accounts for 7,000 additional insolvency cases in 2026 and 7,900 in 2027 that were not previously factored into the risk model. Even before these revisions, the data showed a sobering baseline: in the first nine months of 2025, there were 327 major insolvencies, averaging one every 20 hours.
Asia’s Disproportionate Exposure
While the impact of the conflict is global, the burden is heavily concentrated in the East. Asia is set to absorb 54% of the total global increase in insolvencies. Within this region, the trajectory varies significantly: insolvencies are projected to climb 7% in 2026 and 3% in 2027. China is expected to see increases of 9% and 5% respectively, as the country continues to navigate underlying weakness in its property and consumer sectors.
The most acute pressure in the Asia-Pacific region is currently focused on Taiwan, where insolvency filings are forecast to jump by 14% in 2026. Conversely, Hong Kong and Singapore appear to be bucking the trend. Hong Kong is projected to see a 2% decline in 2026 and a 10% drop in 2027, while Singapore is expected to see a 3% decline in 2026 and 5% in 2027. These regional disparities highlight how specific industrial compositions and local economic conditions can either buffer or exacerbate the shock of rising energy and shipping costs.
The Price of Escalation
The current forecast relies on the stability of the ceasefire brokered by Pakistan on 8 April and extended indefinitely by US President Donald Trump on 22 April. However, the environment remains fragile, particularly given reports of Iranian strikes on three vessels in the Strait on the same day the truce was extended.
Maxime Lemerle, lead analyst for insolvency research at Allianz Trade, has outlined a more severe scenario if the conflict escalates further. A prolonged closure of the Strait would trigger an additional 10% rise in global insolvencies in 2026 and a 3% rise in 2027. This stress test would result in roughly 4,100 additional cases in the United States and 10,500 in Western Europe. For investors and business owners, the next reading of the global insolvency tally will be the primary indicator of whether current ceasefire conditions are sufficient to prevent these deeper, more widespread market failures.
