Strait of Hormuz Closure Could Become a Tipping Point for Global Economy

• While Americans are warily eyeing prices at the pump as oil shipments through the Strait of Hormuz grind to a halt amid the threat of Iranian attacks on vessels, oil is far from the only product for which the world economy is heavily dependent that passes through the waterway. From the metals market to agriculture and autos, a de facto closure of the strait would ripple through business sectors and both the U.S. and world economy.
• Aluminium is one of the biggest non-petroleum commerce casualties of the U.S.-Iran war. In 2025, the Middle East accounted for roughly 21% of unwrought aluminium imports and 13% of wrought aluminium imports, and those percentages have been rising. In addition, the Gulf is a major supplier of aluminium, and disruptions could tighten supply chains for advanced manufacturing. Aluminium prices are already rising, and further disruption could increase input costs for automotive, aerospace, and construction manufacturing in the U.S. and Europe.
• Fertiliser represents one of the biggest downstream risks because roughly one-third of global fertiliser trade transits the Strait of Hormuz, including large volumes of nitrogen exports. Prices at the New Orleans fertiliser hub for urea have already risen from $475/metric ton to $680/metric ton, which comes at a challenging time for the planting window in the Midwest for soy and corn. If those shipments are blocked during the spring planting season, it could wreak havoc on food inflation.
• Petrochemical inputs, plastics, rubber, electronics, batteries, pharmaceuticals, and sugar are among other inputs and sectors facing supply chain stress. If Strait of Hormuz disruptions force vessel rerouting, inland port disruption can escalate quickly as the initial ocean impact may take 10–14 days to appear, but the real pressure typically hits within 2–5 weeks as diverted containers arrive in clusters, terminal congestion rises, and drayage demand outpaces truck and chassis availability.
• Disrupted trade lanes also reduce empty container availability, tightening export capacity in other markets, including North America. For retailers, all of this means higher inbound logistics costs and potential inventory delays, which often translate into higher shelf prices or tighter margins across groceries, consumer goods, and imported products.

(Source: CNCB)