Hormuz Strait Tensions Threaten Fertilizer, Aluminum, and Helium Supplies
Claire Weston
Strait of Hormuz tensions have spread well beyond oil and gas, hitting fertilizers, sulfur, aluminum and helium — urea jumped 6.2% in a single week and helium spot prices have at least doubled, putting global agriculture, semiconductor and manufacturing supply chains under simultaneous stress.
Why did fertilizer prices spike so suddenly?
New Orleans urea — a key global benchmark — rose 6.2% in the week to July 10, its largest weekly gain in over three months.
This means → Qatar Fertiliser Company, Fertiglobe and SABIC all ship through the Strait; once it is blocked, their export corridor shuts down.
In the previous conflict, India — the world's largest urea importer — paid nearly twice the pre-war price to secure supply. This time the escalation coincides with the agricultural calendar shifting to the Southern Hemisphere, leaving Brazil especially exposed.
How does the sulfur shortage ripple into phosphate fertilizers and mining?
Middle Eastern oil-and-gas majors are also major sulfur suppliers. The supply disruption has already forced phosphate plants in Brazil, the U.S. and Morocco to cut output.
Soaring sulfur prices have triggered a bidding war between agriculture and copper-nickel mining. In plain terms = farmers and miners are competing for the same raw material; whoever bids higher gets the cargo.
Argus Media sulfur editor Maria Mosquera said some Middle Eastern cargoes reached India in recent weeks, helping to "ease the most acute tightness," but transit through Hormuz stalled again last week.
How do the impacts differ for agriculture versus mining?
For mining, the main hit so far is eroding production margins — costs rise but product still sells.
For agriculture, cost pressure is harder to absorb. This means → if tensions escalate again, the risk of a rapid tightening in fertilizer supply and prices will amplify quickly.
How badly is aluminum affected?
The Middle East accounts for roughly one-tenth of global aluminum output, but holds a larger share in aluminum billet — a specialty product widely used in automotive, construction and aerospace.
Billet supply premiums surged early in the conflict; they eased after a temporary ceasefire in June but never fully retreated.
This reflects the fact that even rerouting through alternative ports adds costs and delays that keep premiums elevated.
Why is helium the item that worries the semiconductor industry most?
Qatar's Ras Laffan industrial complex supplied roughly one-third of global helium before this round of Middle East tensions erupted in late February.
Helium is a critical input in semiconductor fabrication — used to cool and protect silicon wafers — and is very hard to substitute. In plain terms = without helium, key steps in a chip fab simply cannot run.
Helium does not trade on exchanges, so price transparency is limited. Phil Kornbluth, a helium-market consultant with over 40 years of industry experience, estimates spot prices have at least doubled since March, with the market showing a "significant" supply shortfall.
What is the key variable going forward?
From fertilizers to helium, the shock has become multi-front and simultaneous — a workaround for any single commodity cannot fix the broader problem.
This means → whether a lasting ceasefire or reliable alternative supply routes emerge will directly determine the price trajectory of all these commodities.
If the Strait remains effectively closed in the near term, cost pressures on agriculture, semiconductors and manufacturing will continue to compound.
Content is for reference only, not financial advice.