supply chains · Julian Hinz

A Critical-Inputs Playbook: What the Strait of Hormuz Tells Europe

Julian Hinz — Mon, 15 Jun 2026 00:00:00 +0000

Europe imports only about 4% of its crude oil and 7% of its liquefied natural gas through the Strait of Hormuz. By those measures, the strait’s near-closure since the outbreak of war in February 2026 should barely register in European macro forecasts. Yet the European Central Bank cut its 2026 growth projection by 0.3 percentage points and raised its inflation projection by 0.7 points.

The column traces this discrepancy to a tug-of-war between a bottleneck amplifier and a substitution attenuator: while Europe’s post-2022 energy diversification cushions the direct shock, vulnerabilities persist in critical inputs such as nitrogen fertilizers, jet fuel and petrochemicals, where substitution is slow or nonexistent. What Europe needs is not another energy-crisis playbook but a critical-inputs playbook — serious monitoring and stress testing, strategic reserves for the few inputs that matter most, and a trade and industrial policy that treats chokepoint exposure as a primary parameter.

The Cost of Closing the Strait of Hormuz: Energy Bottlenecks and Global Food Security

Julian Hinz — Sun, 01 Mar 2026 00:00:00 +0000

The brief analyzes a closure of the Strait of Hormuz as a global energy bottleneck that propagates through chemicals, fertilizer production, and food prices. Because the channel carries a large share of global oil and liquefied natural gas, the shock creates especially severe losses for energy- and fertilizer-import-dependent developing countries.

Standard trade models understate these effects when they miss the bottleneck mechanism. The distributional burden is highly uneven: aggregate global costs may be moderate, but vulnerable economies in South Asia, sub-Saharan Africa, and the Middle East face much larger welfare losses and food security risks.

The EU–India Trade Deal: Strategic Diversification in an Era of Uncertainty

Julian Hinz — Thu, 01 Jan 2026 00:00:00 +0000

The brief studies an EU–India free trade agreement as a strategic diversification tool in a more uncertain trade environment. Simulations point to mutual welfare gains, substantially higher bilateral trade, and a meaningful reallocation of trade away from China.

For India, the agreement provides a hedge against US tariff pressure. For the EU, it supports de-risking and signals a commitment to open trade. The structural benefits are framed as a long-term partnership rather than a temporary response to current policy shocks.

Lieferketten: Geoökonomie im Roten Meer

Katrin Kamin — Thu, 01 Feb 2024 00:00:00 +0000

Critically Important: The Heterogeneous Effect of Diplomatic Tensions on Trade

Julian Hinz — Wed, 15 Jul 2020 00:00:00 +0000

Impact of diplomatic tensions on UK - Russia trade. Russian exports to UK and EU (left), Russian exports to UK by select HS sections (right).

With global value chains interlocking today’s economies, what is the impact of diplomatic tensions on international trade? We exploit variation in monthly data on imports, a measure of imported input use in the domestic economy, and the incidence of bilateral diplomatic tensions to show that their impact on trade is heterogeneous across countries and industries. Trade in industries that are crucial for domestic production is more sensitive to political tensions. We expose the underlying mechanism in a simple framework before testing it in reduced form.