Global Trade Crisis Deepens as Strait of Hormuz Blockade Strangles Key Supplies
The global economy is under pressure as oil prices climb and supply chains break down. Four weeks after Iran closed the Strait of Hormuz, key industrial materials are running dangerously low. Developing nations are bearing the brunt of the crisis, while wealthier countries have managed to reduce their energy dependence over time.
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Since Iran blocked the Strait of Hormuz during the US-Israeli offensive, global trade in fertilisers, sulphur, and naphtha has faced severe disruption. Prices for urea, a key fertiliser, have surged by 37% in the Middle East, where Gulf states supply 19% of the world's nitrogen exports and 36% of its urea. Sulphur costs have jumped 25% in just one month, hitting copper and nickel processing hard. Meanwhile, damaged storage tanks in the UAE's Fujairah port have halted operations at some naphtha terminals, further tightening supply.
The shortages are hitting certain countries especially hard. US grain farmers are already struggling with higher fertiliser costs, while Brazil, India, and Europe could face similar problems if the blockage continues. Chile, the Democratic Republic of Congo, and Indonesia rely heavily on Gulf sulphur, and Japan's petrochemical industry—producing plastics like PVC and polyethylene—is at risk. Morocco, a major phosphate exporter, also depends on sulphur shipments from the region. Advanced economies like Germany have cut their energy use over the past three decades, making them less vulnerable than poorer nations. Manufacturing-heavy countries still need more energy than those driven by services, but efficiency gains have softened the blow. Low- and middle-income countries, however, lack the same resilience. Many now face threats to food security and industrial production as the crisis deepens.
The Strait of Hormuz closure has triggered sharp price rises and supply shortages in critical materials. Fertilisers, sulphur, and naphtha remain at risk, with developing economies suffering the most severe effects. Without a resolution, the disruptions could spread further, affecting food supplies and manufacturing worldwide.
