By Opus Connect
With the Strait of Hormuz still disrupted, oil, petrochemicals, and shipping costs have become harder to predict, and that is feeding straight into M&A. Reuters reports that the conflict is choking petrochemical supply through Hormuz, pushing plastic prices to four-year highs, while options markets began signaling a rising risk of $150 oil if the disruption continued.
For dealmakers, that kind of volatility does not just move markets in theory. It makes valuation harder to defend, diligence more complicated, and already fragile deal certainty even weaker—especially in sectors tied to energy, freight, inputs, or cross-border execution.
Most commentary on the Iran war and M&A stops at one point: markets do not like uncertainty.
That is true, but it is not the most useful takeaway for lower and middle-market dealmakers.
The more practical point is this: the disruption is not hitting every deal the same way. It is freezing deals where underwriting depends on stable energy prices, predictable shipping, cross-border travel, and valuation confidence that can hold together for more than a week. At the same time, it is pushing buyers toward businesses that are easier to explain, easier to finance, and easier to diligence.
In early March, Reuters reported bankers and investors were already warning that the conflict could disrupt fundraisings and cross-border M&A, with travel halted and discussions suspended. The Financial Times separately reported that U.S. oil and gas dealmaking had fallen into “paralysis” as commodity volatility made price agreement harder.
That is the real change in this market. Buyers are not just becoming cautious. They are becoming much more selective about which businesses they can still defend to lenders, investment committees, and seller-owners.
Today, three questions matter more than they did a month ago: Can this business protect margin? Can it close without operational surprises? Can we still defend the valuation if the macro backdrop gets worse before signing?
That is exactly where the market is splitting.
The first pressure point is valuation confidence. If a business has real exposure to oil, gas, petrochemicals, freight, or raw materials, the underwriting case can move fast in the wrong direction. In the Reuters article cited above, it’s noted that last year the Middle East accounted for more than 40% of global polyethylene exports, which helps explain why buyers are suddenly paying closer attention to input exposure and pass-through ability. Barclays says a prolonged Hormuz disruption could remove 13 to 14 million barrels per day of oil supply.
The second pressure point is diligence. In this kind of market, diligence is no longer just about quality of earnings, customer retention, and legal cleanup. It now has a geopolitical layer. Buyers need to ask earlier about shipping routes, feedstock exposure, pricing resets, inventory strategy, supplier concentration, and how quickly costs can be passed through. If those questions come late, the process gets shaky late.
The third pressure point is process execution. Cross-border deals become harder to run when management travel is disrupted, site visits are delayed, and basic process confidence starts to slip. Reuters’ reporting on postponed travel and suspended discussions is not just a headline-risk story. It is an execution-risk story.
So what should BD teams do with that?
In this volatile, geopolitically stressed market, the best business development strategy focuses on three things:
- First, re-rank target lists. Push up companies with domestic sourcing, local customers, recurring revenue, and lower direct commodity exposure. Push down targets whose story depends on smooth international freight, stable input costs, or tight working-capital timing.
- Second, rewrite outreach. In this market, generic growth language is too soft. Lead with resilience. Talk about pricing power, supply continuity, contract structure, customer stickiness, and margin defensibility.
- Third, bring the hard questions forward. Ask early what happens if oil stays elevated, if shipping remains uneven, or if a key input gets more expensive fast. The buyers that win from here are the ones that surface those answers before the process gets expensive.
The takeaway is simple: the Iran war is not just slowing M&A. It is changing which companies still feel financeable, diligenceable, and actionable. The smart BD teams will not treat geopolitics as background noise. They will use it as a filter for which stories still hold together when the market does not.
Written March 2026
