The Impact of the Strait of Hormuz Blockade on the Global Economy
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Author : Bozhou Marine
Update time : 2026-04-20 09:36:11
The spillover effects of the US Israel Iran conflict on the world economy are spreading from the intense game between bears and bulls in the capital market to real production and life. From the emergency of European aviation operators' oil depots, to the shortage of fertilizers during the spring sowing season, and to the insufficient supply of key raw materials in the manufacturing industry, multiple impacts are spreading from near to far, from local to overall, and affecting the global economy.
Lack of aviation fuel: difficult to maintain 23 day warning line
In Europe, the upcoming summer is usually the peak season for tourism, but now the risk of flight cancellations due to rising aviation fuel prices has sharply increased.
The Director General of the International Energy Agency, Fatih Birol, recently stated in a media interview that Europe's aviation fuel reserves "may only have about six weeks left", and if the situation in the Middle East continues to disrupt oil supply, many flights may be forced to cancel "soon".
Data shows that Europe has the highest dependence on Middle Eastern aviation fuel. According to the International Energy Agency's forecast model, considering the current aviation fuel inventory in Europe, if a way can be found to replace 75% of the imported aviation fuel from the Middle East, the aviation fuel inventory in European countries may drop to the alert level in August, which is less than 23 days; If it can only replace 50%, it will drop to the alert level in June.
According to calculations, once European aviation fuel inventories fall below 23 days, some airports will experience a shortage of fuel, directly leading to flight cancellations. Currently, some European countries have less than 20 days of aviation fuel inventory.
The current inventory of aviation fuel in Europe is at its lowest level in three years. In the context of war, the weak supply and rising prices of aviation fuel make some short haul flights with smaller profit margins more susceptible to impact. In addition, low-cost airlines will experience a significant increase in short-term financial costs as they do not use hedging methods to order aviation fuel.
Lack of fertilizer: production may decrease in the third quarter.
The industry generally believes that the US Israel Iraq conflict has caused obstacles in fertilizer transportation, shortages of agricultural machinery and fuel, and impacted agricultural trade and financial markets, bringing a "compound crisis" to global agriculture that will last throughout the year. It is expected that there will be a round of food price increases from the end of this year to next year, which will make life even more difficult for many low-income people.
Data shows that approximately one-third of the global fertilizer trade needs to be transported through the Strait of Hormuz. The World Bank's commodity data shows that the price of urea, the most widely used nitrogen fertilizer product, rose rapidly after the war began. In March, the international average price of urea was about $726 per ton, a significant increase from about $472 in February.
According to data from the US Department of Agriculture, in 2026, the area planned by US farmers to grow corn will decrease by 3% year-on-year, and they will switch to growing soybeans. This is because planting corn consumes a large amount of nitrogen fertilizer, while soybeans have strong natural nitrogen fixation ability and consume relatively less nitrogen fertilizer.
In Argentina, many farmers originally planned to grow wheat, but now they have started to switch to crops such as barley and oats due to the high cost of fertilizers in the early stages of wheat cultivation.
Due to the planting cycle, the impact of war on agriculture is reflected in a certain lag on the consumer side. The Food and Agriculture Organization of the United Nations stated that current global food inventories have to some extent buffered the impact of the war, but risks are accumulating.
Material shortage: Inventory may run out in two months
The impact of the Middle East conflict on the global manufacturing industry is becoming increasingly evident. A recent survey released by Reuters shows that the war has disrupted global shipping and air transportation networks, leading to logistics delays and increasingly severe "imported inflation", posing a serious obstacle to the recovery of the global manufacturing industry.
Analysis shows that in the short term, conflicts have led to a synchronous increase in energy, transportation, and chemical costs for the global manufacturing industry. As the tension continues, inventory consumption is increasing. According to industry conventions, the inventory cycle of key raw materials for most manufacturing enterprises is usually several weeks to two months. If inventory runs out or runs out, the company will have to adjust production capacity. If the war continues for three months, the risks faced by the global manufacturing industry will shift from "rising costs" to "decreased availability of key raw materials and components".
Vidia Mani, an associate professor at the University of Virginia and a global supply chain expert, said that due to the impact of the war, the production facilities of Qatar, the world's major liquefied natural gas supplier, have been damaged, resulting in a severe shortage of helium gas, which is an important raw material for semiconductor manufacturing, medical, aerospace industries, and more. Mani said that manufacturers using helium typically only store materials that can be used for two months. If the supply situation continues to improve, everything from automotive chips to mobile phone manufacturing will face difficulties.
Oxford Economics also pointed out that helium shortages may affect the construction of artificial intelligence data centers, and companies may therefore reduce their investment plans.
In addition, aluminum widely used in the manufacturing industry is also facing the risk of shortage. Due to the Gulf countries producing approximately 9% of the world's aluminum, international aluminum prices have reached a high level in over four years due to supply disruptions. Analysts believe that the shortage of aluminum will affect the production capacity of a range of industries, from product packaging to automobiles.
Looking at a longer timeline, the inflation caused by the war will affect the actual consumption capacity of the world, delay the recovery process of some economies, and exacerbate the risk of global manufacturing demand contraction. The pace of pressure in different industries and regions may not be completely synchronized, but the global manufacturing industry is currently showing a trend of spreading from local disturbances to systemic risks.
On March 10, UN Secretary-General's spokesperson Dujarric pointed out that if the Strait of Hormuz were closed, global energy and food markets would be impacted.
Latest data released by China's General Administration of Customs on November 7 showed that in the first 10 months of this year, China's goods trade maintained a steady growth trend, with total import and export values increasing by 3.6% year-on-year.
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