The impact that the Israeli-Palestinian conflict will have on global and national supply chains will depend on how much the war escalates between the two countries, a new report claims.

According to research published this week by S&P Global Market Intelligence, entitled “Ports, electronics and healthcare: Supply chain impact of conflict in Israel,” Israel’s electronics, defense and healthcare supply chains could face disruptions if the conflict with Palestine escalates further.

Israeli suppliers made up 14% of EU computer processor imports during the 12-month period that ended July 31, 2023. Israel also exported $3.15 billion of aerospace equipment and $2.62 billion of telecom equipment in 2022.

S&P Global said that Israel’s pharmaceuticals supply chain, which is worth over $2 billion, is particularly susceptible to logistics network disruptions. Israel accounts for 1.1% of U.S. pharmaceutical imports and 0.8% of EU pharmaceutical imports.

At least one shipping line has said that maritime operations have continued as normal at the Port of Ashdod as of October 9. However, air freight transported through the Tel Aviv airport could be subjected to disturbances.

Israeli Prime Minister Benjamin Netanyahu declared war on Hamas — an Islamist militant movement and one of the Palestinian territories' two major political parties — on October 8 following a surprise assault by militants one day after the 50th anniversary of the start of the 1973 Yom Kippur War.