A tanker sails through the Gulf near the Strait of Hormuz during the conflict between the United States, Israel, and Iran, March 11, 2026, in the United Arab Emirates. Viewed from northern Ras Al Khaimah, near the border with Oman’s Musandam Territory.
Stringer | Reuters
Americans are watching oil prices cautiously as crude oil shipments through the Strait of Hormuz come to a halt amid threats of ship attacks by Iran. The IEA took the unprecedented step of announcing on Wednesday that it would release 400 million barrels of oil from its reserves. But oil is not the only product for which the global economy relies heavily on the shallow, narrow waterways that connect Persian Gulf ports with the rest of the world. From metals markets to agriculture to automobiles, the de facto closure of the Strait would have ripple effects on business sectors and both the U.S. and global economies.
aluminum is a good example. This is one of the biggest non-oil commercial casualties of the US-Iran war. In 2025, the Middle East will account for approximately 21% of unwrought aluminum imports and 13% of forged aluminum imports, and the proportion is rising. Unwrought aluminum is raw raw metal in shapes such as ingots and billets, while forged aluminum is mechanically formed into sheets, rods, or other final shapes that are used directly in manufacturing.
Matt Meenan, a spokesman for the Aluminum Association, a trade group representing the U.S. aluminum industry, said: “The situation in Iran is having an impact, and as the conflict continues, industry concerns may increase.” “This is a very dynamic situation,” Meenan said.
The longer the conflict in the Middle East drags on, the more damage it will do to the supply of products Americans expect to see on store shelves.
“The Gulf region is a major supplier of aluminum and any disruption could strain supply chains for advanced manufacturing,” said Tony Perri, practice director for supply chain security and resilience at global risk management firm BSI Consulting. “Aluminum prices are already rising, and further disruption could increase input costs for automotive, aerospace, and construction manufacturing in the U.S. and Europe.”
Aluminum futures contracts traded over the past month.
Peri said grocery stores could be affected. “Fertilizers pose one of the biggest downstream risks,” he said. “Roughly a third of the world’s fertilizer trade passes through the Strait of Hormuz, including significant nitrogen exports.”
Urea prices in the New Orleans Fertilizer Hub have already increased from $475/ton to $680/ton. “It’s not a great time to be planting soybeans and corn in the Midwest,” said Darrell Fletcher, managing director of commodities at Bannockburn Global Forex, an Ohio-based foreign exchange and risk management firm.
Perri said if these shipments were blocked during the spring planting season, it could wreak havoc on food inflation.
Fertilizer company CF Industries’ stock price performance over the past month.
Craig Geske, vice president of strategic solutions at logistics and transportation management company Traffics, said raw materials and sectors such as petrochemicals, plastics, rubber, electronics, batteries, pharmaceuticals and sugar are facing supply chain stress.
If disruptions in the Strait of Hormuz force ships to reroute, disruption to inland ports could escalate rapidly. “Although it may take 10 to 14 days for the first marine impacts to be felt, the real pressure typically hits within two to five weeks as diverted containers arrive in droves, terminal congestion increases, and drayage demand exceeds truck and chassis availability,” Geske said.
Disruptions to trade lanes will also reduce the availability of empty containers, tightening export capacity in other markets, including North America. This could result in missed commitments, increased demurrage charges (fees shippers pay for storing cargo in ports for longer periods of time), and severe congestion at already strained ports.
Global shipping giants Maersk and Hapag-Lloyd have already suspended routes to the Middle East.
“I’ve seen a lot and I tend to be calm about big market moves, but I still think the market is underestimating the situation here,” Fletcher said. “Only time will tell, but the closures will create daily bottlenecks and make the problem exponentially worse,” he added.
He noted that just five days of war had caused massive disruption to Asian economies and warned that a tipping point could be near.
“If there’s no resolution within another week, I think the market will reflect that, and it will be reflected in pricing relatively quickly. I’m still very cautious defensively, given the disruption that has occurred so far, the lack of clear resolution so far, and what it will take to get back to ‘normality’, whatever that may be,” Fletcher said.
Moody’s also expects a prolonged shutdown to have a negative impact on many sectors.
“Inventories for many goods that cross the Strait to markets in Asia and Europe typically cover only a few weeks, which means that if disruptions continue, shortages could occur relatively quickly,” said Andrei Quinn Balabanov, supply chain industry practice lead at Moody’s.
Significant quantities of petrochemicals and plastic raw materials also flow through Hormuz, serving many industries. “About 85% of polyethylene exports from the Middle East go through this route,” said Usha Haley, a professor and supply chain expert at Wichita State University’s Barton School of Business.
Risk of increased retail prices and decreased economic activity
As the U.S. government and its allies consider ways to maintain trade through the straits, some supply chain experts point to reasons why much shipping can remain stable. First, while non-oil vessels may be harassed by Iranian speedboats, there is no value for Iran in intercepting cargo containers. Reports that the U.S. Navy has been escorting ships through the strait since Tuesday were false, but the U.S. could devise a plan to prevent Iran from seizing the ships, and U.S. air power and missiles could destroy Iranian missile batteries attempting to attack the ships.
Mr Haley said new marine insurance measures could make it more viable for shippers to sail through the Channel, but premiums would rise significantly. “All of these factors will cascade through global supply chains, and consumer prices will rise across the board within about a month. We are entering an era of high inflation and manufacturing contraction,” he said.
Iran has reasons to limit trade disruptions. “They need oil, otherwise they don’t have money,” Quantum Strategy’s David Roche told CNBC, referring to Iran. “There is an incentive not to attack Western shipping, so that they can export their oil,” Roche said, predicting that the strait would be partially reopened within two to three weeks, ending the “edge” of the crisis and allowing tankers and cargo ships to pass through.
Iran continued to ship millions of barrels of oil to China during the conflict.
If the situation doesn’t subside, it could hit unexpected places, like the clothing racks at your favorite store.
“The risks are particularly acute for Asia’s clothing industry, which relies on petrochemicals transported through the strait to produce synthetic fibers,” Quinn Barabanov said. “Aluminum shipments from the UAE traveling through the waterway may also be affected, and given the metal’s widespread use in industrial production and the limited ability of many manufacturers to carry large inventories, the disruption is most likely to manifest as an increase in prices. Similar supply pressures could impact Australian and other agricultural producers, particularly through fertilizer shipments through the Channel.”
Although the latest consumer price index report released by the government on Wednesday morning found inflation stable, many economists and consumers remain concerned about the possibility of war-related inflation. Retail is a great example of how industries and consumers will suffer from rising energy, fuel and logistics costs.
“For retailers, all of this means higher inbound logistics costs and potential inventory delays, often leading to higher shelf prices and compressed margins for groceries, consumer goods, and imported goods,” said Nishit Rastogi, founder and CEO of logistics optimization technology company Locus.
Changes in delivery routes often extend delivery time to the end consumer by 1 to 10 or more days, while pass-through surcharges increase costs by 5% to 20%.
Rastogi added that while retailers can reduce the impact by improving route efficiency, truckload ratios and mode selection, reducing the number of miles traveled exposed to fuel fluctuations in the first place, “the risk of unmanaged rerouting hurts both reliability and wallets.”
