When Iran closed the Strait of Hormuz to commercial shipping on March 2, global markets fixated on crude oil. Brent surged past $100 per barrel and politicians scrambled to release strategic reserves. But a quieter, slower shock is now moving through the metals, fertilizer, and semiconductor supply chains that keep the modern economy running.
At the center of it is sulfur. Oil and gas refining generates sulfur as a byproduct — roughly 92% of global supply originates that way. The Middle East produces about 24% of the world’s total, and the majority of the seaborne trade moves through Hormuz. That flow has since seized up, with tanker transits down an estimated 90%.
Sulfur is the feedstock for sulfuric acid — widely regarded as the world’s most produced industrial chemical — which is essential for processing copper, nickel, cobalt, and lithium. Prices had already risen 500% from their 2021 lows before the conflict began and have climbed a further 10–15% since.
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“I have heard that traders are already struggling to source any,” Ivanhoe Mines CEO Robert Friedland wrote on X. “Sulphuric acid prices will therefore significantly increase across Africa… and if the disruption lasts longer than ~3 weeks, copper oxide operations will have to close as they’ve run out of acid.”
The exposure is sharpest in nickel. Indonesia accounts for more than half of global nickel production but sources roughly three-quarters of its sulfur from the Middle East. High-pressure acid leaching plants, which process laterite ore into battery-grade nickel, typically hold only one to two months of sulfur inventory. Several large Indonesian producers have already suspended long-term contract offers while they assess their exposure.
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Copper in Africa faces the same pressure. “In the African Copperbelt, sulfuric acid is essential for leaching, underpinning around 45% of Democratic Republic of the Congo output or 6% of global supply,” Bloomberg Intelligence senior analyst Alon Olsha said.
Agriculture is next in line. Data firm Kpler estimates that roughly a third of global fertilizer trade moves through the strait, drawing on nitrogen, urea, and ammonia exports from Qatar, Saudi Arabia, and the UAE. Urea prices at the New Orleans hub have already jumped from $475 to $680 per metric ton.
American Farm Bureau Federation president Zippy Duvall wrote to President Trump this week urging protection for fertilizer ships, warning that record-high input costs could climb further and threaten yields during the spring planting window.
Semiconductors are exposed, too. Taiwan depends heavily on liquefied natural gas for electricity, and Qatar alone supplies roughly 30% of its LNG — much of it through Hormuz. TSMC, which manufactures approximately 90% of the world’s most advanced chips, runs on that grid. A sustained power disruption on the island carries consequences that ripple across every industry that runs on semiconductors.
Maersk and Hapag-Lloyd have already suspended Middle East routes, and seven of the 12 members of the International Group of P&I Clubs have withdrawn war risk coverage across the Mideast Gulf — meaning even a reopening of the strait will not instantly restore the flows.
Unlike oil, sulfur is a granular solid — it cannot move through pipelines and has no fast substitute. New acid capacity takes years to build. Alternative supply routes take months to redirect. Price moves first — and by the time it does, the inventory at the end of the chain is already gone.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
