The conflict in the Middle East is affecting the supply of critical materials for Asian industry, agriculture, and technologyPlastics, aluminum, and microchips: What the closure of the Strait of Hormuz costs the world economy beyond oil and gas The conflict in the Middle East is affecting the supply of critical materials for Asian industry, agriculture, and technology The blockade of the Strait of Hormuz threatens to unleash a perfect storm, impacting consumers’ wallets but also crops, the packaging of everyday products, and the use of apps like ChatGPT, Gemini, and Copilot. For every day the U.S.-Israeli war against Iran drags on, global trade in products beyond oil and natural gas is restricted, the impact of which on the global economy is almost as significant, if not more so, although much more subtle. “The real vulnerability lies in derivatives, not crude oil,” argues Felipe Elink Schuurman, co-founder of the commodities trading firm Sparta, in a report. He warns that second-round effects are imminent, already impacting supply chains, and that “this crisis goes far beyond the price of a barrel of oil.” Five million barrels of petroleum products crossed the Strait of Hormuz daily before the crisis. Fertilizers, helium, fuel for ships and aircraft, aluminum, and distillates like naphtha have ceased to circulate freely through this waterway, which at its narrowest point measures barely 34 kilometers (21 miles) in width. Steve Gordon, global director of research at Clarksons, estimates in a report published Monday that vessel traffic has decreased by 95% compared to pre-conflict levels. Of the 125 vessels that crossed the area daily just over two weeks ago, only about five now pass through on average. This standstill impacts 19% of all refined petroleum products consumed worldwide, according to data compiled by the United Nations Conference on Trade and Development (UNCTAD). It also affects 13% of all chemical products, including fertilizers, and 2% of dry grain. India, China, Southeast Asian countries, and East Africa are the most affected by supply shortages in the Middle East, while the United States is more protected due to its own petrochemical industry and although Europe faces rising costs, it is less directly dependent on the countries affected by the conflict. Barclays experts maintain that “the recent escalation of conflicts in the Middle East has profoundly underscored the fragility of global energy supply chains.” A third of all global maritime fertilizer trade originates from the Persian Gulf countries. This market, which reached 16 million tons in 2024, accounts for 67% of global urea consumption, 20% of diammonium phosphate (DAP), and 9% of monoammonium phosphate (MAP). All of these are essential for cultivating corn, rice, and wheat in countries like Sudan, which imported 54% of its fertilizers from Gulf countries in 2024, and Australia (32%). They are also crucial for Spain, whose dependence on nitrogen and phosphate fertilizer exports from Saudi Arabia and Qatar is 7.4%, according to data from the Elcano Royal Institute. “The indirect implications for the global market could be drastic, and some regions could subsequently suffer fertilizer shortages,” notes the British consultancy CRU. Beyond the 41% surge in the price of Brent crude, the European benchmark, the conflict is impacting gasoline and diesel prices, as well as the price of fuel for airplanes and ships. The International Air Transport Association (IATA) has already warned of an 8% to 9% increase in ticket prices. The cost of marine fuel — light fuel oil — has climbed from $521.5 per ton to $1,119.5 in Singapore, the world’s largest marine fuel supply port. “Demand for marine fuel is structurally inelastic: ships cannot stop in the middle of the ocean. If refineries are not operating, the fuel oil supply dries up once stocks are depleted,” Schuurman notes in his report. Iranian drone attacks on Qatari energy facilities forced the state-owned Qatar Energy to halt production of liquefied natural gas (LNG) and derivatives such as naphtha, used by major Asian petrochemical companies to produce ethylene, an essential component for the production of plastics such as PVC, polyethylene, and polypropylene, used in the manufacture of packaging like plastic bottles, construction materials, and household appliances. It is also crucial for steel mills and the automotive industry in Southeast Asian countries. “Markets aren’t really considering the cascading implications of the naphtha shortage,” Mateen Chaudhry, founder and CEO of the corporate advisory firm BCMG, told Bloomberg. “It could be the canary in the coal mine,” he added. Another consequence of the closure of Qatar’s Ras Laffan production facility is the significant decrease in the global helium supply. Qatar is the world’s second-largest helium producer, accounting for 33% of global production, second only to the United States, according to data from the United States Geological Survey (USGS). Although helium is often associated with inflating balloons, its uses are far more widespread. It is a key component for the technology industry, facilitating the chip manufacturing process. Therefore, it represents a significant source of uncertainty for companies like TSMC, Samsung, and Intel, and consequently, for tech giants like Nvidia, Microsoft, and Apple, which use their chips. Analysts point out that if the disruption to Qatar’s production lasts another 60 to 90 days, the cost of helium could skyrocket by up to 50%, given that it has a lifespan of only 45 days before it evaporates, making storage difficult. “A disruption in the Strait of Hormuz wouldn’t automatically halt chip production, but it could have repercussions for energy costs, material supply, and the economics of building AI infrastructure,” Shawn Kim, head of technology research at Morgan Stanley, told Bloomberg. The price surge is also being reflected in other industrial raw materials, such as aluminum and coal. ING strategists believe that aluminum could reach $4,000 per ton in a scenario of severe disruption “due to the concentration of export-oriented smelting capacity in the Gulf,” a market already experiencing supply shortages. This is despite the fact that, according to the Dutch bank’s strategists, the Persian Gulf countries account for nearly 9% of global aluminum production. Added to this is coal, a fuel that can allow China to circumvent rising oil and natural gas prices, which has surged 17.5% since the end of February. The ramifications of the war initiated by the U.S. and Israel continue to emerge, despite Donald Trump’s insistence that Operation Epic Fury will soon end. Time will tell whether the second-round effects are contained, or if they will spread and ultimately impact the price of the new iPhone or even a simple bottle of water. 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