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Do Industry Paricipants Need a NACHO strategy?

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There is another Mexican food abbreviation these days, as NACHO has joined TACO in the alphabet soup of acronyms. NACHO stands for Not A Chance Hormuz Opens, in reference to the recalcitrance of either side to compromise  in the Iran war,

with both actively keeping the Strait closed. While I have no idea why social media has chosen Mexican food as an abbreviation meme, this does bring up the need for longer-term planning that includes a downside scenario.

NACHO
Image AFP

If NACHO indeed proves to be the case, a new round of longer-term planning will be needed for the industry, which won’t be an easy task. So far, the impact of the war hasn’t materially impacted demand outside of the Gulf and the immediate region of the conflict – as yet. But each day that goes on without the Strait open adds to the probability of deeper downside economic impacts.

Short-Term Impacts

The short-term impacts are easy to see today. Overflights and routing changes are adding to the time and cost of many routes, particularly Europe to Asian overflights already impacted by the Ukraine-Russia conflict now having to avoid Iran. The Middle East 3 are dodging attacks and are only operating at about 50% of normal schedules. And of course, the price of jet fuel has doubled. With a substantial portion of the world’s oil transiting the Strait, fuel prices are now expected to remain high throughout 2026 as no rapid solution to end the war is on the horizon.

There is another Mexican food abbreviation these days, as NACHO has joined TACO in the alphabet soup of acronyms. NACHO stands for Not A Chance Hormuz Opens, in reference to the recalcitrance of either side to compromise  in the Iran war with both actively keeping the Strait closed. While I have no idea why social media has chosen Mexican food as an abbreviation meme, this does bring up the need for longer-term planning that includes a downside scenario.