Thanks to the immediate impact of the closure of the Strait of Hormuz to most oil and gas shipping, reflected in steep increases to the cost of petrol, air fares, and energy costs, it can be easy to forget that this international waterway is also a key transit point for a wide range of other crucial commodities that will have slow-burning but important ramifications in the months to come.
Helium is not usually considered a critical material in the world economy, but it is used to cool semiconductor wafers during the manufacturing process and is an important component for fibre optics, defence sector manufacturing, and medical imaging; Qatar produces a third of the world’s supply as a byproduct of its natural gas fields, which have come under attack and cannot pass the Iranian blockade of the Strait in any event. So too sulphur, the base element in sulphuric acid, which is important for mining, EV batteries, and fertilisers: the Middle East accounts for 45% of global production. How a paralysed supply chain affects these sectors – and the industries that rely on them – remains to be seen, but the outlook will be negative for months to come.
On the subject of fertilisers, the outlook is no less grim: the Gulf states are major producers of such major components of these critical substances, with one-third of the world’s seaborne supply of them passing through the Strait of Hormuz. Supplies of urea, ammonia, and hydrogen – all key parts of the nitrogen fertiliser production process – have been choked off from the rest of the world due to the Strait’s closure. With this type of fertiliser critical to half of global food production, this is a ticking time bomb for the world’s food security. If these products cannot be shipped, then Northern hemisphere farmers will not be able to plant their crops in April or May; even if the war ends soon, the transport backlog will have knock-on effects for the rest of 2026 and potentially beyond. In rich countries, this will result in inflated prices at grocery stores: in the developing world, this will result in famine.
Contact our Transport Team to discuss strategies for mitigating supply chain and logistics issues.
