US Military Strikes Endanger Global Oil Supplies and Hike International Commercial Costs

Global maritime traffic has been pushed into a state of paralysis following a joint US-Israeli military attack against Iran and subsequent heavy retaliatory strikes from Tehran. The escalating warfare has moved beyond a crisis for oil tankers, threatening the international supply chains for food, fertilisers, and plastics.

The Strait of Hormuz, a vital artery bordered by Iran and Oman, is currently facing a total blockade.

Experts from the analysis firm Kpler warn that there is “no viable alternative” to this route, as land-based options involving pipelines and lorries are strictly limited by capacity.

Plastics and Ports Under Fire

The conflict has directly hit critical infrastructure. An explosion and subsequent fire broke out at a quay in the Port of Jebel Ali in the United Arab Emirates—a central hub for polymer exports. Meanwhile, port operations in Kuwait were temporarily suspended following reports of falling debris.

The region is a global powerhouse for materials, producing up to 23 million tonnes of polyethylene annually. According to Argus Media, this represents 15% of the world’s supply of the essential plastic.

Shipping Giants Flee

The world’s leading shipping companies, including Denmark’s Maersk and France’s CMA CGM, have frozen all transits through both the Strait of Hormuz and the Suez Canal.

Vessels are now forced to circumnavigate the entire African continent to reach Europe from Asia and the Middle East, adding thousands of kilometres and several days to journeys.

Navigation in the Gulf has become “prohibitive or impossible” as insurers, such as the Scandinavian firm Skuld, have either hiked premiums to extreme levels or cancelled coverage entirely.

Armateurs France reports that 60 French-flagged or French-owned vessels are currently trapped inside the Gulf.

Threat to Global Food and Farming

The disruption poses a severe risk to global food security and agriculture:

• Fertilisers: Roughly 33% of the world’s fertilisers, including ammonia and sulphur, pass through the Strait. Major importers including China, India, Brazil, and various African nations are now facing a supply vacuum.
• Rising Costs: As fertilisers are produced using oil and gas, the war-driven spike in energy prices is expected to create a “snowball effect” on farming costs.
• Food Imports: The Middle East remains structurally dependent on food imports. Notable trades at risk include Brazilian maize heading to Iran and US agricultural exports to the UAE, valued at approximately MUR 68.6 billion ($1.5 billion).

The current gridlock mirrors the US military operation of June 2025, which saw entire shipments of Indian rice destined for the region blocked.

Analysts from XP Investments warn that a “large part” of these essential food imports must pass through or near the now-embattled Strait.

Source: Defi Media