The crucial exports blocked by Hormuz closure

[Getty Images]

The interruption of oil and gas supplied through the Strait of Hormuz due to the US-Israel war with Iran has dramatically pushed up global energy prices.

Petrol has gone up already and UK domestic heating bills are almost certain to follow.

But it’s not just fuel that’s been impacted by the conflict. A host of other vitally important chemicals, gases and other products normally enter international supply chains via the Hormuz Strait.

BBC Verify has found that the price of a host of goods – ranging from food, to smartphones, to medicines – could be affected, as the number of ships passing through the Hormuz Strait has dropped from well over 100 a day before the war to just a handful.

Here is what could be impacted.

Petrochemicals are derived from oil and gas and they are produced in great quantities for export by countries in the Gulf region.

And one of the most important is fertiliser, vital for global agricultural production.

According to the United Nations, around a third of the world’s fertilisers – such as urea, potash, ammonia and phosphates – normally pass through the Hormuz Strait.

A man using fertiliser in a field — Small farmers rely heavily on fertilising crops with urea [Getty Images]

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

Analysts have warned that a shortage of these ferilisers is likely to be particularly damaging to agricultural production now because March and April are the northern hemisphere’s planting season and less fertiliser use now by farmers will impact yields for later in the year.

“A relatively brief closure could disrupt an entire growing season, with food security consequences that persist long after the strait reopens,” according to researchers at the Kiel Institute.

The Institute’s work suggests a full closure of the Strait of Hormuz could push up global wheat prices by 4.2% and fruit and vegetable prices by 5.2%.

And it estimates that the most badly affected countries in terms of the overall increase in food prices would be Zambia (31%), Sri Lanka (15%), Taiwan (12%) and Pakistan (11%).

Russia normally supplies around a fifth of global fertiliser exports and analysts say it could potentially increase production to fill the gap.

Vladimir Putin’s special envoy, Kirill Dmitriev, has said that Russia, a major producer of commodities like fertiliser, is “well positioned“.

A third of global shipments of helium gas normally come from Qatar and pass through the Strait of Hormuz.

It’s a byproduct of the production of natural gas and is used in the manufacture of semiconductor wafers, which are then processed into the microchips used in computers, vehicles and household appliances.

Helium is also used to cool the magnets in Magnetic Resonance Imaging (MRI) scanners used in hospitals.

A patient in an MRI machine — [AFP via Getty Images]

Qatar’s giant Ras Laffan plant, which produces the gas, has shut down production after Iranian missile and drone strikes.

And the Qatar government has warned it will take three to five years to repair the damage, raising fears about supplies.

In 2023, the US Semiconductor Industry Association warned of “price spikes” if global helium supplies were disrupted.

Analysts have warned the knock-on impact of the Hormuz blockage could be an increase in the prices of a host of cutting-edge technologies, from smartphones to data centres.

And Prashant Yadav, a senior fellow for global health at the Council on Foreign Relations, has warned MRI prices could be driven up by prolonged helium shortages.

“MRI machines require somewhere between 1,500 to 2,000 liters helium to cool the magnets. Every time you do a scan, a little bit of that boils off or evaporates.

“People like to think helium’s predominant use is in data centers, semiconductors and cooling for the AI and data industry. But we can’t forget that helium is quite important for MRIs and for other medical users,” he told BBC Verify.

Derivatives from petrochemicals – such as methanol and ethylene – are vital materials in the global production of pharmaceuticals, including painkillers, antibiotics and vaccines.

A person holding a syringe — Many vaccines are derived from petrochemical products [Getty Images]

The countries of the Gulf Co-operation Council – Saudi Arabia, Qatar, Oman, the United Arab Emirates, Kuwait and Bahrain – are estimated to account for around 6% of global petrochemical production capacity.

These nations primarily use the Strait of Hormuz to export these chemicals to the wider world, with around half going to Asia.

India produces a fifth of the world’s generic (non-branded) pharmaceutical exports, many of which are sent on to the US and Europe.

Many of these pharmaceutical products are also normally flown to global markets via Gulf hub airports, particularly Dubai, which have been severely disrupted by the conflict.

Some analysts have warned of the potential for higher medicine prices for households as a result of the disruption in the Strait of Hormuz.

Sulphur is another byproduct of the processing of crude oil and natural gas and produced in large volumes for export in the Gulf region.

Around half of the global seaborne sulphur trade normally passes through the Strait of Hormuz.

Its main use is as an agricultural fertiliser, but it is also vital for metal processing.

Sulphur is used to make sulphuric acid, which is used for processing copper, cobalt and nickel and also for the extraction of lithium.

All of those metals are needed for the production of batteries, which are used in everything from domestic appliances to electric vehicles to military hardware like drones.

Analysts warn that if sulphur supplies remain interrupted, the result will likely be higher prices for consumers of products containing batteries.

Additional reporting by Tom Edgington and Joshua Cheetham

Graphics by Tom Shiel

What claims do you want BBC Verify to investigate?

Source link