What the eight-month timeline means for business costs

Speaking on the BBC's Sunday with Laura Kuenssberg programme on 26 April 2026, Darren Jones said the economic effects of the Iran conflict would persist long after any ceasefire takes hold.

"I think our best guess is eight-plus months from the point of resolution that you'll see economic impacts coming through the system."

The Strait of Hormuz carries roughly a fifth of global oil and gas shipments, according to the US Energy Information Administration. Its effective closure since US and Israeli strikes on Iran began in February 2026 has sent Brent crude sharply higher. Jones attributed the price pressure directly to the actions of US President Donald Trump in the Middle East, telling the BBC: "You're going to see prices go up a bit as a consequence of what Donald Trump has done in the Middle East."

For mid-market businesses, the eight-month figure is significant because it sets a minimum planning horizon. Even under an optimistic scenario in which full de-escalation and reopening of the strait occurred tomorrow, input costs for fuel, freight, ingredients and industrial gases would not normalise until early 2027 at the soonest. If the conflict drags on through summer 2026, as current diplomatic signals suggest it might, the tail extends well into the second half of next year.

Trump announced an indefinite extension of the US ceasefire with Iran last week, pausing most fighting, according to the Guardian's report. However, further progress stalled after Trump told his envoys not to travel to Pakistan for scheduled talks at the weekend.

Which supply chains are most exposed

Energy and fuel

The most direct transmission channel runs through crude oil and liquefied natural gas. UK pump prices have already risen, and the government has urged motorists to fill up as usual rather than panic-buy, according to Jones's remarks. Jet fuel is under particular strain; the government has asked air travellers not to change plans over potential shortages.

For SMEs that rely on road freight or operate energy-intensive processes, such as manufacturing, cold-chain logistics or commercial baking, the fuel cost line is the one to watch. Diesel and electricity contracts signed before February 2026 will offer some buffer, but businesses rolling onto new tariffs in the coming quarters face markedly higher rates.

Food production and hospitality

Jones confirmed the government is working to secure stocks of carbon dioxide (CO₂), a critical input across food packaging, brewing and medical applications including MRI scanning. The minister made the point with deliberate bluntness, noting that if jet fuel shortages disrupted holidays and CO₂ shortages hit beer supplies, "the summer might be pretty depressing for people."

The CO₂ concern is not hypothetical. In September 2021, the sudden shutdown of CF Industries' fertiliser plant at Billingham on Teesside, then the UK's largest source of food-grade CO₂, triggered weeks of disruption across meat processing, carbonated drinks and fresh-food packaging. The government ultimately brokered a short-term subsidy to restart production. That episode exposed how a single point of failure in industrial-gas supply could cascade through the food chain within days.

The current stockpiling effort suggests ministers are applying lessons from 2021, though Jones did not specify the volume of CO₂ reserves being targeted or whether any direct subsidies to producers were under consideration.

Brewing and events

Jones explicitly referenced the men's football World Cup, which kicks off on 11 June 2026, as a benchmark for ensuring adequate beer supply. Breweries large and small depend on CO₂ for carbonation and packaging. During the 2021 crisis, several regional brewers reported halting production for days. A repeat during a major sporting summer would hit hospitality revenues hard.

Government contingency measures: what operators should expect

Jones described the government's approach as centred on live monitoring of stock levels and contingency planning for supply-chain disruption. He told the BBC the work he was doing with the prime minister involved examining "all of those things and saying, 'What can we do within our power to help people to get through those difficult times?'"

In practical terms, this appears to mean three things for businesses:

1. Enhanced data collection. Government departments are tracking inventory levels across fuel, food and industrial gases more closely than usual. Operators in regulated sectors, particularly energy retailers and food wholesalers, should expect more frequent reporting requests.

2. CO₂ stockpiling. The specific mention of carbon dioxide reserves signals that the Department for Energy Security and Net Zero is in active dialogue with industrial-gas suppliers. Whether this involves strategic reserves, guaranteed purchase agreements or subsidies remains unclear.

3. No rationing, for now. The government's public messaging has consistently urged consumers and businesses to behave normally. Jones's comments suggest ministers believe supply disruption will manifest as higher prices rather than outright shortages on supermarket shelves, at least under current conditions.

Political pressure for a legislative response

The Liberal Democrats have called for a food-security bill to be included in the next King's Speech, expected in May 2026, according to the Guardian's report. The proposal would place food-supply resilience on a statutory footing. At the time of writing, no draft bill text has been published, and neither the Conservative Party nor other opposition parties have formally responded to the proposal. Whether the government adopts the idea or tables its own legislation remains to be seen.

What SMEs can do now to protect margins

The eight-month timeline, while imprecise, offers a framework for scenario planning. Several practical steps follow.

Stress-test supplier contracts

Businesses with fixed-price supply agreements expiring in the next two quarters should model the impact of a 15 to 25 per cent increase in energy and freight costs, a range consistent with the crude-price movements observed since February 2026. Where contracts include force-majeure or price-adjustment clauses, operators should review the trigger language carefully.

Audit CO₂ dependency

Any business that uses carbon dioxide, whether for carbonation, modified-atmosphere packaging or dry-ice logistics, should map its supply chain back to the producing plant. The 2021 crisis showed that UK CO₂ supply is concentrated among a small number of facilities. Identifying alternative suppliers or substitute processes now is cheaper than scrambling during a shortage.

Lock in energy where possible

For firms whose energy contracts are due for renewal, the current forward curve already prices in conflict-related risk. Locking in a fixed rate may look expensive relative to 2024 levels, but it removes the downside of a further spike if the conflict escalates or the strait remains closed longer than expected.

Build cash buffers

Higher input costs compress margins before they compress revenue. Finance directors should revisit working-capital forecasts and, where possible, extend credit facilities while lender appetite remains intact. The Bank of England's latest credit-conditions survey, published in Q1 2026, indicated that lending standards for SMEs had not yet tightened materially, but that picture could shift if the conflict persists.

Communicate with customers early

If price increases are unavoidable, transparency tends to preserve relationships better than surprise surcharges. The eight-month horizon gives operators a credible, externally validated reason to open those conversations now rather than waiting for the next invoice cycle.

None of these steps eliminate risk. But the minister's public acknowledgement of an eight-month tail, unusual in its specificity, at least gives operators a number to plan around. In an environment defined by geopolitical uncertainty, that counts for something.