Hormuz disruption sends shock through oil and food supply chains
· UPIMay 10 (Asia Today) -- Supply chain disruptions caused by the Iran war are spreading beyond oil markets into global food and chemical industries, as shipping through the Strait of Hormuz remains heavily restricted, according to reports Friday from Bloomberg, The Washington Post and The Wall Street Journal.
Global oil inventories declined by roughly 4.8 million barrels per day between March 1 and April 25, while disruptions have affected about 30% of global urea supplies, triggering planting cutbacks in Thailand, the Philippines, Bangladesh and Australia, the reports said.
The United Nations Food and Agriculture Organization warned that if shipping routes are not restored before India and Brazil begin major fertilizer purchases in June, the world could face crop losses and food inflation comparable to the economic shock seen during the COVID-19 pandemic.
Global oil inventories fall at record pace
According to estimates from Morgan Stanley, worldwide oil inventories have been falling at a pace well above previous quarterly records tracked by the International Energy Agency.
Natasha Kaneva, head of global commodities research at JPMorgan Chase, warned that if Hormuz shipping remains disrupted, Organization for Economic Cooperation and Development oil inventories could reach "operational stress levels" by June and fall to minimum operating thresholds by September.
Although the International Energy Agency coordinated the release of 400 million barrels of emergency reserves, Bloomberg reported that the United States has so far released only about 79.7 million barrels of the 172 million barrels it pledged. U.S. crude inventories, including the Strategic Petroleum Reserve, have fallen for four consecutive weeks and risk reaching their lowest level since 1982.
Fertilizer shortages threaten Asian agriculture
The Washington Post reported that damage to Middle Eastern gas infrastructure has disrupted nearly 30% of global urea supplies, pushing spot prices up about 40% since February.
China, the world's largest fertilizer producer, has restricted urea exports to secure domestic supply, while demand for Russian fertilizer has surged.
Thailand's agriculture minister said attempts to secure Russian urea supplies may fail because shipping delays could prevent deliveries from arriving during the current planting season.
Máximo Torero, chief economist at the Food and Agriculture Organization, warned that prolonged shipping disruptions could cause severe crop losses across multiple countries and create economic impacts similar to those during the pandemic.
Analysts also warned that even if Hormuz shipping resumes soon, supply chains may require months to stabilize because restarting Middle Eastern production facilities becomes increasingly difficult the longer shutdowns continue.
Scientists have additionally warned that a potential super El Niño weather pattern this year could worsen crop losses through drought and extreme heat.
Farmers in Southeast Asia cut planting
A rice farmer in Thailand's Suphan Buri province told The Washington Post he decided not to plant another crop after calculating that soaring fuel, fertilizer and plastic costs would leave him with guaranteed losses.
The farmer estimated production costs for his 19-hectare farm would exceed $33,000, while expected revenue after harvest would total only about $22,000.
Thailand's rice exporters also lost access to Gulf markets after shipping companies halted cargo operations following the outbreak of war in late February. The Middle East accounted for about 17% of Thailand's rice exports in 2025, with Iraq serving as its largest single buyer.
Meanwhile, The Wall Street Journal reported that diesel prices in Manila climbed to 123 pesos per liter, or about $8.73 a gallon, more than double prewar levels.
A farmer in the Philippine town of Lian said diesel-powered farming equipment rental costs rose 25%, cutting his profits in half.
Fertilizer prices in the Philippines also surged, with nitrogen fertilizer rising about 40% to 2,600 pesos ($46) per bag.
Sulfuric acid surge pressures mining and semiconductor sectors
The war has also triggered severe disruptions in sulfur and sulfuric acid markets.
According to The Wall Street Journal, citing Argus pricing data and the U.S. Geological Survey, sulfuric acid prices in China rose about 1,150% in May compared with two years earlier, while Middle Eastern sulfur prices surged roughly 750%.
Chile, the world's largest sulfuric acid importer, saw prices jump about 230%.
The reports said China and Middle Eastern producers simultaneously restricting exports amplified the global supply shock.
Sulfuric acid is widely used in phosphate fertilizer production, copper processing, battery manufacturing, semiconductor fabrication and water treatment, but the chemical is highly corrosive and usually stored only in limited quantities.
Indonesia's sulfur prices have risen more than 80% since the war began, prompting nickel producers to cut output for electric vehicle batteries and stainless steel manufacturing.
Chile is also facing concerns over copper production disruptions because sulfuric acid is essential for ore processing.
Analysts said the United States may be relatively insulated because of domestic refining capacity and supply from Canada and Mexico, though disruptions in Chilean copper and Indonesian nickel production could still raise costs for U.S. data centers, electric vehicles and home construction.
-- Reported by Asia Today; translated by UPI
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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260510010001982