Plastics, aluminum, and microchips: What the closure of the Strait of Hormuz costs the world economy beyond oil and gas

"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."

"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."

"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."

The blockade of the Strait of Hormuz creates widespread economic disruption extending far beyond crude oil prices. Vessel traffic has declined 95% from pre-conflict levels, with only five ships crossing daily compared to 125 previously. This restricts circulation of fertilizers, helium, fuel, aluminum, and naphtha. The blockade impacts 19% of global refined petroleum products, 13% of chemical products including fertilizers, and 2% of dry grain. India, China, Southeast Asia, and East Africa face the most severe supply shortages, while the United States remains relatively protected due to domestic petrochemical capacity. Europe experiences rising costs but maintains less direct dependence. Experts warn that second-round supply chain effects are already emerging, with vulnerabilities in derivatives posing risks as significant as crude oil impacts.

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