Hormuz closure disrupts key global supply chains

The disruption of oil and gas supplies through the Strait of Hormuz, caused by the US-Israel conflict with Iran, has sharply increased global energy prices.

Petrol prices have already risen and UK household heating costs are expected to follow.

However, the impact of the conflict extends beyond fuel. A wide range of essential chemicals, gases and other products that normally move through the Strait of Hormuz are also affected.

BBC Verify reports that prices of various goods—from food to smartphones to medicines—could rise, as the number of ships passing through the strait has dropped from well over 100 a day before the war to only a few.

Here is what could be affected.

Fertilisers (Food)

Petrochemicals, derived from oil and gas, are produced in large quantities for export by Gulf countries. One of the most important of these is fertiliser, which is essential for global agriculture.

According to the United Nations, about one-third of the world's fertilisers—including urea, potash, ammonia and phosphates—normally pass through the Strait of Hormuz.

Data from the World Trade Organization shows that, since the conflict began, shipments of fertiliser-related products through the route have collapsed.

Analysts warn that shortages could significantly harm agricultural production, especially as March and April mark the northern hemisphere's planting season.

Reduced fertiliser use now is expected to affect crop yields later in the year.

Researchers at the Kiel Institute state that even a short disruption could affect an entire growing season, with food security consequences lasting beyond the reopening of the strait.

Their analysis suggests a full closure could increase global wheat prices by 4.2% and fruit and vegetable prices by 5.2%.

The study also estimates the countries most affected by rising food prices would be Zambia at 31%, Sri Lanka at 15%, Taiwan at 12% and Pakistan at 11%.

Russia, which normally supplies about one-fifth of global fertiliser exports, could increase production to offset the shortage. Its special envoy Kirill Dmitriev has said the country is "well positioned."

Helium (Microchips)

Around one-third of global helium shipments come from Qatar and pass through the Strait of Hormuz. Helium, a byproduct of natural gas production, is used in manufacturing semiconductor wafers, which are essential for microchips in computers, vehicles and household appliances.

It is also used to cool magnets in MRI scanners in hospitals.

Qatar's Ras Laffan plant, a major helium production site, has shut down following Iranian missile and drone strikes.

The government has warned repairs could take three to five years, raising concerns about supply shortages.

In 2023, the US Semiconductor Industry Association warned of potential price spikes if helium supplies were disrupted. Analysts say the current situation could increase prices for advanced technologies, including smartphones and data centres.

Prashant Yadav of the Council on Foreign Relations has also warned that prolonged shortages could drive up MRI costs, noting that each scan consumes helium.

Petrochemical derivatives (Medicines)

Petrochemical derivatives such as methanol and ethylene are essential for producing pharmaceuticals, including painkillers, antibiotics and vaccines.

Countries in the Gulf Co-operation Council—Saudi Arabia, Qatar, Oman, the United Arab Emirates, Kuwait and Bahrain—account for about 6% of global petrochemical production.

These countries rely on the Strait of Hormuz to export these materials, with about half going to Asia.

India produces roughly one-fifth of the world's generic pharmaceutical exports, many of which are shipped onward to the US and Europe.

Many of these medicines are also transported through Gulf hub airports, especially Dubai, which have been heavily disrupted by the conflict.

Analysts warn that these disruptions could lead to higher medicine prices for consumers.

Sulphur (Metals/Batteries)

Sulphur, another byproduct of oil and gas processing, is produced in large quantities in the Gulf region. About half of global seaborne sulphur trade passes through the Strait of Hormuz.

While widely used in fertilisers, sulphur is also essential for metal processing. It is used to produce sulphuric acid, which is required for processing copper, cobalt and nickel, as well as extracting lithium.

These metals are critical for manufacturing batteries used in household appliances, electric vehicles and military equipment such as drones.

Analysts warn that continued disruption to sulphur supplies could lead to higher prices for battery-dependent products.