Energy Volatility’s Impact on Vietnam’s Logistics Sector
Just a US$10 increase per barrel in oil prices could raise energy import costs for many Asian economies by tens of billions of dollars each year.
Understanding Vietnam’s Trade Vulnerability
Vietnam stands out with its astounding trade openness, boasting a trade-to-GDP ratio of nearly 200%. This means the Vietnamese economy is particularly sensitive to external shocks, even when its direct trade relations with regions in conflict, like the Middle East, are limited. Although countries like Iran and Israel contribute minimally to trade turnover, the ripple effects of geopolitical tensions can still be felt throughout the nation, especially through energy prices, logistics costs, and fluctuations in global financial markets.
The Sensitivity of Oil Prices
Energy markets are known for their rapid response to geopolitical conflicts, particularly in oil-rich regions like the Middle East, which supplies approximately one-third of the world’s oil. With the Strait of Hormuz handling nearly 20% of global daily oil trade, any hint of instability can cause oil prices to surge.
Even a seemingly small increase of US$10 per barrel can lead to a staggering rise in annual energy import costs for many Asian economies, including Vietnam. While the country still produces some crude oil, it heavily relies on imported refined petroleum products—importing 9.9 million tons worth about US$6.8 billion in 2025 alone. The impact of rising oil prices typically manifests as cost-push inflation, influencing sectors ranging from transportation to agriculture.
In Vietnam, transport costs comprise about 15-20% of many manufacturing industries’ expenditures. This means when energy prices fluctuate, the ramifications echo throughout various sectors, creating challenges for inflation management. Currently, Vietnam aims to keep inflation between 4% and 4.5%, yet prolonged spikes in oil prices could place significant pressure on consumer price indices.
Rising Global Transport and Logistics Costs
The second major impact stems from global supply chains and logistics networks. Disruption in the Middle East often translates to heightened maritime insurance premiums and adjusted shipping routes, which in turn inflate transport costs.
Vietnam’s surge in export turnover—exceeding US$475 billion in 2025—highlights the critical importance of logistics in maintaining competitiveness. Accumulating shipping costs can squeeze profit margins for export-driven businesses, especially in industries with lower added value, like textiles and electronics. Additionally, rising fuel prices place substantial strain on domestic transportation sectors, compounding logistics costs, which already sit at an estimated 16-20% of GDP.
Financial Market Pressures: Exchange Rates and Capital Flow
Another channel through which external shocks are felt is the global financial market. Geopolitical instability typically drives investors toward safer assets, putting pressure on emerging market currencies. For Vietnam, increasing energy prices amplify the demand for foreign currency to import essential fuels, making the forex market particularly volatile.
Despite this volatility, the overall impact on Vietnam remains relatively moderate, mainly due to its limited direct trade with the Middle East and the macroeconomic resilience built from past global instability. However, short-term effects are likely to focus on cost-push inflation and rising transport expenses that could elevate production and operational costs across various sectors.
The Unseen Pressure on Postal Workers
Behind the numbers and economic analyses, the daily lives of postal workers and delivery drivers offer a human perspective on these macroeconomic factors. As fuel prices surge, postal workers feel the immediate weight of increased operational costs, noticing the change not through charts but via the fuel gauge on their motorbikes.
For them, delivering packages entails traveling extensive distances. Even a minor increase in fuel costs can significantly alter their daily earnings. While logistics companies may adjust shipping fees to offset rising expenses, it’s the delivery workers who face customer dissatisfaction directly, creating a paradox in operational adjustments. As prices climb, these workers experience the brunt of customer reactions at their front doors.
In essence, the ripples of global energy volatility stretch far beyond boardrooms — they affect lives and livelihoods at the grassroots level, highlighting the complex interconnections between global markets and local realities.