Cyprus businesses brace for disruption as Middle East tensions rise
The possible closure of the Strait of Hormuz is expected to disrupt supply chains and commercial activity, with knock-on effects on prices, the secretary general of the Cyprus Chamber of Commerce and Industry (Keve), Philokypros Rousounides, said on Monday.
Speaking to the Cyprus News Agency (CNA), Rousounides said that such a development would create disruptions in the supply chain and in the country’s commercial activity, pointing to delays, rising transport costs and sharply higher insurance premiums due to the war.
“It will be an additional cost and challenge for the supply chain,” he said, stressing that timely delivery of goods and the increase in overall costs would be the main concerns.
He added that price pressures were also being fuelled by developments in the oil market, noting that crude prices had risen by 10 per cent on the day.
Market estimates, he said, were pointing to levels above 100 to 120 dollars per barrel, a scenario that would have corresponding negative effects on the wider economy.
At the same time, Rousounides struck a cautious tone. “We are watching calmly, we do not want to panic the market and our partners,” he said.
However, he added that if the war were to continue for several weeks – something he said “we hope” will not happen, first and foremost for humanitarian reasons – problems could emerge.
“At this stage, we call for calm and we are assessing the situation hour by hour,” he said.
Asked whether alternative trade routes were available in the event of shortages, Rousounidis said that contingency planning was under way.
“Contingency planning under way and alternatives exist,” he said, adding that the situation would be evaluated before any such options were put into effect.
He also said that over the weekend the Keve had been in contact with chambers in affected countries, so that if Cypriot businesses or entrepreneurs encountered difficulties, “we can institutionally find a solution.”
For now, he said, no such incidents had been reported, with the chamber remaining in constant communication and closely monitoring developments.
The possible closure of the Strait of Hormuz is expected to disrupt supply chains and commercial activity, with knock-on effects on prices, the secretary general of the Cyprus Chamber of Commerce and Industry (Keve), Philokypros Rousounides, said on Monday.
Speaking to the Cyprus News Agency (CNA), Rousounides said that such a development would create disruptions in the supply chain and in the country’s commercial activity, pointing to delays, rising transport costs and sharply higher insurance premiums due to the war.
“It will be an additional cost and challenge for the supply chain,” he said, stressing that timely delivery of goods and the increase in overall costs would be the main concerns.
He added that price pressures were also being fuelled by developments in the oil market, noting that crude prices had risen by 10 per cent on the day.
Market estimates, he said, were pointing to levels above 100 to 120 dollars per barrel, a scenario that would have corresponding negative effects on the wider economy.
At the same time, Rousounides struck a cautious tone.
“We are watching calmly, we do not want to panic the market and our partners,” he said.
However, he added that if the war were to continue for several weeks – something he said “we hope” will not happen, first and foremost for humanitarian reasons – problems could emerge.
“At this stage, we call for calm and we are assessing the situation hour by hour,” he said.
Asked whether alternative trade routes were available in the event of shortages, Rousounidis said that contingency planning was under way.
“Contingency planning under way and alternatives exist,” he said, adding that the situation would be evaluated before any such options were put into effect.
He also said that over the weekend the Keve had been in contact with chambers in affected countries, so that if Cypriot businesses or entrepreneurs encountered difficulties, “we can institutionally find a solution.”
For now, he said, no such incidents had been reported, with the chamber remaining in constant communication and closely monitoring developments.
Cyprus businesses are more broadly bracing for potential disruption following the escalation of tensions in the Middle East, with tourism, fuel prices and supply chains emerging as the first areas of concern.
Although it is too early to quantify the overall impact, early signs have already appeared.
Within the first 24 hours of the expanded military conflict, concerns were raised over the island’s tourism sector, which has been one of the strongest drivers of the economy in recent years.
Given Cyprus’ proximity to the Gulf, major tour operators have contacted local authorities expressing unease over developments.
Some are considering cancelling tour packages for April, at least at the start of the summer season, until the situation becomes clearer.
Rousounides said there was information that large tour agencies had expressed concern and may proceed with cancellations.
Michalis Antoniou, director general of the Employers and Industrialists Federation (Oev), said the situation is being closely monitored, noting that since 2023 Cyprus has been internationally recognised as a safe country in the wider region.
Economist Yiannis Telonis, speaking to philenews, warned that tourism could be affected, particularly based on what is being made public internationally.
He said a plan should be drawn up to address potential risks so that Cyprus is fully prepared ahead of the summer season.
His comments come despite previously encouraging messages regarding the course of tourism in 2026.
Attention has also turned to fuel prices.
Iran closed the Strait of Hormuz on Saturday, while an attack on a tanker was reported off the coast.
Roughly one-third of global oil trade passes through the strait, which connects the Persian Gulf with the Gulf of Oman and the Arabian Sea.
Telonis said there is currently no justification for fuel price increases, though he cautioned that this could change if the disruption continues.
He also called on consumers to be particularly cautious about profiteering.
In aviation, the impact has been immediate. A total of 73 flights to and from Cyprus airports were cancelled over the past 48 hours, 25 on Saturday and 48 on Sunday, mainly involving Middle Eastern destinations after airspace closures.
Meanwhile, the Employers and Industrialists Federation (Oev) has set up a special task group to support businesses facing disruptions linked to the escalating crisis, following an extraordinary meeting convened on Sunday.
The meeting, chaired by Oev president George Pantelides and attended by the organisation’s director general and department heads, assessed the economic and business implications of the ongoing military operations in the wider region.
According to the federation, the newly established group will collect and codify requests from enterprises of Cypriot interests affected by the crisis before forwarding them to the competent authorities.
In cooperation with the state, Oev will seek to propose practical solutions and ways to manage emerging challenges.
Affected businesses may contact Oev at info@oeb.org.cy, using the subject line “Crisis in the Middle East”, or via WhatsApp or Viber at +357 99024617.
At a macroeconomic level, Oev said the situation calls for calm and continuous assessment, with particular attention to market reactions and oil prices.
The federation added that it will monitor developments closely, keep businesses informed and act accordingly.
At the same time, state authorities have mobilised to handle requests from Cypriots and their families in affected areas, placing Cyprus’ embassies in the region at the disposal of citizens.
A separate announcement by the Foreign Ministry provides contact details for Cyprus’ embassies in Egypt, Jordan-Iraq, the UAE, Iran, Israel, Qatar, Kuwait, Lebanon, Bahrain, Oman, Palestine (Representation in Ramallah), Saudi Arabia-Yemen and Syria.
The National Crisis Management Centre can be reached at +357 22801000 or via email at cycc@mfa.gov.cy where direct contact with embassies is not possible.
Where absolutely necessary, citizens may also contact EU delegations in the region, including in Abu Dhabi (+971 2 2051111), Riyadh (+968 2469 9500, also responsible for Bahrain and Oman) and Doha (+974 4047 1184).