Introduction

When investors think about the Strait of Hormuz, they think about oil. That is understandable. Roughly 20% of the world’s daily crude supply passes through the narrow waterway between Iran and Oman, and the 2026 closure has sent Brent crude above $110 per barrel.

But oil is only part of the story. The Strait of Hormuz is also a critical chokepoint for helium, fertilisers, aluminium, petrochemicals, plastics, and sulfur, commodities that feed into industries far removed from energy. The disruption to these supply chains is now rippling through semiconductor manufacturing, agriculture, food packaging, textiles, construction, and even water supply, often in ways that are not immediately obvious.

For investors, this matters because the economic damage from the Hormuz crisis extends well beyond energy prices and airline shares. Understanding which non-energy sectors are exposed and how the disruption cascades from one industry to the next, is essential for assessing portfolio risk and identifying opportunities in an increasingly interconnected global economy.

This article maps the hidden supply chains running through the strait and traces their downstream impact across the global economy.

 

Helium: From Qatar to Your Smartphone

One of the most unexpected consequences of the Hormuz closure has been a global helium shortage. Qatar produces roughly a third of the world’s helium supply from its Ras Laffan Industrial City, one of the largest LNG and helium production hubs on the planet. Virtually all of it is shipped through the Strait of Hormuz. When strikes hit the Ras Laffan facility, approximately 30% of global helium supply was removed from the market overnight.

Helium is not just the gas that fills party balloons. It is a critical input in semiconductor manufacturing, where it is used to cool silicon wafers during the etching process and to maintain the ultra-clean environments that chip fabrication requires. It is also essential for MRI scanners in hospitals, fibre optic cable production and aerospace applications.

South Korea is particularly exposed. The country sourced nearly 65% of its helium from Qatar in 2025, and it is home to Samsung Electronics and SK Hynix, the world’s two largest memory chip manufacturers. Both companies are actively seeking alternative helium suppliers, including from the US and Russia, while reportedly maintaining around six months of helium stock. TSMC in Taiwan is better positioned in terms of multiple suppliers, though reserves are smaller at about two months.

However, analysts warn that a 60 to 90 day helium squeeze could push delivered costs up by 25 to 50%, with the sharpest impact falling on chipmakers with weaker supply contracts. The recovery timeline is also concerning. Even if the strait reopened tomorrow, experts estimate a minimum two to three month shutdown of helium production and a four to six month period before the helium supply chain returns to normal.

Rerouting helium shipments around the Cape of Good Hope adds roughly 3,500 nautical miles per voyage, around $1 million in additional fuel costs and 10 to 14 days of transit time. For a commodity that requires specialised cryogenic transport, these delays are not easily absorbed. Around 200 specialised helium containers are reportedly stranded near the Strait of Hormuz, unable to reach their destinations.

The helium-to-semiconductor chain illustrates how a disruption in the Middle East can directly affect the technology sector thousands of miles away. Investors with exposure to chipmakers, AI infrastructure, data centres, or consumer electronics should be paying close attention to helium supply dynamics.

 

Fertilisers: The Food Security Connection

Around one-third of the global seaborne fertiliser trade passes through the Strait of Hormuz. Iran is one of the world’s largest exporters of nitrogen-based fertilisers and the Gulf states collectively account for roughly 30% of global urea trade. The region is also the global price setter for sulfur, with nearly half of all seaborne sulfur trade passing through the strait.

The sulfur connection is particularly important because it creates a secondary supply chain threat. Fertiliser producers need sulfuric acid to convert phosphate rock into a form that plants can absorb. China imports roughly four million metric tons of sulfur annually from the Gulf. Morocco’s OCP Group, the world’s largest phosphate exporter, depends on approximately 3.7 million metric tons. Any sustained disruption to sulfur supply constrains phosphate fertiliser production globally, even in countries far from the Middle East.

The pricing impact has been severe. The cost of granular urea has jumped from around $400-490 per metric ton before the crisis to approximately $700. The sulfur market was already structurally tight before the crisis, with prices peaking in January and the Hormuz closure has tightened it further. The FAO projects that global fertiliser prices could average 15 to 20% higher in the first half of 2026 if the crisis persists.

The downstream implications are significant. Fertiliser is not a discretionary purchase for farmers, it is essential for maintaining crop yields. Higher fertiliser costs feed directly into food prices, with a lag of one to two growing seasons. In the United States, farmers preparing for spring planting are already reporting concerns about input costs. The American Farm Bureau Federation has flagged the Hormuz disruption as a key risk for the US agricultural sector.

The UN Food and Agriculture Organization has warned there is no more than a three-month window for action before “risks escalate significantly, affecting global planting decisions for 2026 and beyond.” Poorer countries, particularly African nations that import large volumes of grain, are the most vulnerable to a food price spike.

For investors, the fertiliser chain connects the Hormuz crisis to agricultural commodities, food retailers, food producers and emerging market economies. A prolonged disruption could trigger a food inflation cycle reminiscent of the spike that followed Russia’s invasion of Ukraine in 2022.

 

Aluminium: Gulf Smelters Under Pressure

The Middle East is a major global supplier of primary aluminium outside China, producing around 9% of global output. The UAE’s Emirates Global Aluminium (EGA) and Bahrain’s Alba are among the world’s largest smelters and both depend on the Strait of Hormuz for exports.

The crisis escalated sharply on March 28 during what traders are calling the “Weekend of Fire,” when strikes targeted the Al Taweelah smelter operated by EGA and the Alba smelter in Bahrain. EGA reported “significant damage” to its power infrastructure, leading to the “freezing” of metal in its potlines, a technical disaster that could take over a year to repair. Alba has declared force majeure on all shipments.

The market impact has been immediate. LME aluminium prices have surpassed $3,500 per tonne, with regional premiums in the US Midwest and Rotterdam hitting record highs. Over 150,000 tonnes of aluminium previously registered on the London Metal Exchange have been pulled from warehouses as industrial consumers scramble to secure supply.

Aluminium is used across a vast range of industries, from automotive and aerospace to construction, packaging and electronics. Higher aluminium prices flow through to car manufacturers, beverage can producers, building material companies and any business that depends on lightweight metals. The automotive sector, already managing the costly transition to electric vehicles, faces yet another input cost headwind.

The aluminium disruption also highlights a structural vulnerability. Global aluminium supply outside China is concentrated in a relatively small number of smelters, several of which sit in the Persian Gulf. Even if the conflict ends soon, the physical destruction of smelter capacity means the aluminium supply deficit will persist for years.

 

Petrochemicals and Plastics: The $3.8 Trillion Chain

Perhaps the broadest non-energy impact of the Hormuz closure is on petrochemicals and plastics. The Gulf hosts some of the world’s largest production facilities for polyethylene, the most widely used thermoplastic globally, with roughly 84% of the Middle East’s polyethylene output depending on the strait for export. Around a third of global seaborne methanol trade also passes through Hormuz. The Gulf states shipped roughly 6.5 million tons of monoethylene glycol in 2025, a key input for polyester fibres, packaging and textiles.

Asia is where the pain is most acute. Between 60 and 70% of Asian naphtha, the primary petrochemical feedstock used to produce ethylene, propylene, and butadiene, passes through the strait. Naphtha is the lifeblood of Asia’s petrochemicals industry. Japan relies on imports for more than 60% of its naphtha supply, with about 70% of those imports coming from Middle Eastern sources.

Naphtha prices surged 74% within two weeks of the crisis beginning, hitting over $1,000 per metric ton by late March. Major petrochemical companies in South Korea, including Yeochun NCC and in Taiwan have declared force majeure. Asian plastics producers have also declared force majeure as feedstock shortages forced them to curtail output.

The downstream effects of naphtha and polymer shortages are enormous. Petrochemical feedstocks flowing through the Gulf have a downstream impact on an estimated $3.8 trillion in goods globally, from food packaging and plastic bags to synthetic textiles, detergents, medical supplies and automotive components. South Korea has already reported plastic bag shortages. Some plastics prices have risen 15%, with buyers along the supply chain stockpiling product in anticipation of further tightening.

For investors, the petrochemicals chain connects the Hormuz crisis to consumer goods, retail, healthcare, automotive, and textiles, sectors that may not appear to have any direct exposure to Middle Eastern shipping routes but are deeply dependent on feedstocks that flow through them.

 

Water: The Gulf’s Most Overlooked Vulnerability

One sector rarely discussed in the context of the Hormuz crisis is water supply. The six Gulf states, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, are among the most water-scarce countries on earth and depend overwhelmingly on desalination to supply drinking water to their combined 62 million people. The region operates more than 400 desalination plants and produces roughly 40% of the world’s desalinated water.

Desalination requires continuous energy and a steady maritime supply of chemicals and equipment. When the strait closed, it affected water, energy and food systems simultaneously. Kuwait and Oman depend on desalinated water for around 90% of their supply. Bahrain relies on it for 85% and Saudi Arabia for roughly 70%. Major cities including Abu Dhabi, Dubai, Doha, Kuwait City and Jeddah are now almost entirely dependent on desalinated water.

The crisis has already directly affected water infrastructure. Bahrain reported that an Iranian drone caused material damage to one of its desalination plants near Muharraq. A desalination plant on Iran’s Qeshm Island was also reportedly struck, cutting off water supply to 30 villages.

While this may not appear to be a direct investment theme, it feeds into the broader risk picture for any company with operations, supply chains, or customer bases in the Gulf region. If water supply becomes unreliable in Gulf states, the consequences for economic activity, construction and population stability would be severe.

 

How the Disruptions Connect: A Cascade of Sectors

What makes the Hormuz crisis particularly complex for investors is how these supply chains intersect and amplify each other. The disruption does not stop at the first affected industry, it cascades.

Helium → Semiconductors → AI and Consumer Electronics

Qatar’s helium shutdown slows chip fabrication at Samsung and SK Hynix. Tighter chip supply drives up prices for memory, processors and AI infrastructure. Data centre buildouts face delays. Consumer electronics become more expensive.

Sulfur → Phosphate Fertiliser → Food Prices → Consumer Spending

Gulf sulfur exports halt. Morocco, China and Indonesia cannot produce enough phosphate fertiliser. Farmers face higher input costs. Crop yields fall or food prices rise. Consumer spending comes under pressure, particularly in emerging markets. Central banks face a fresh inflation dilemma.

Naphtha → Polymers → Packaging → Retail and Healthcare

Asian naphtha supplies collapse. Plastic and polymer prices surge. Food packaging, medical supplies and synthetic textiles become scarcer and more expensive. Retailers absorb or pass on costs. Healthcare supply chains face disruption.

Aluminium → Automotive → Construction → Consumer Goods

Gulf smelters are damaged or stranded. LME aluminium prices hit record premiums. Car manufacturers, beverage can producers and construction firms all face higher input costs. EV manufacturers, already managing battery material costs, absorb another margin hit.

These are not theoretical scenarios. They are unfolding now. The interconnected nature of modern global supply chains means that a disruption at one chokepoint can cascade through dozens of sectors, often affecting companies that appear to have no direct exposure to the Middle East.

For investors, mapping these second and third-order effects is where the real value lies. The obvious trades, long energy and short airlines, were priced in within the first week of the crisis. The less obvious effects on semiconductors, food producers, packaging companies, water infrastructure and consumer goods are still developing and still offering opportunities for those paying attention.

 

What Investors Should Watch

Several variables will determine how deep these non-energy disruptions go:

  • Duration of the closure. Most industries have four to eight weeks of inventory before shortages become critical. The helium and fertiliser sectors are already approaching this threshold. Samsung and SK Hynix reportedly hold around six months of helium, but smaller chipmakers may not.
  • Rerouting capacity. Alternative shipping routes around the Cape of Good Hope add cost and time but can partially offset the disruption for bulk commodities. Specialised cargo like cryogenic helium and LNG is much harder to reroute efficiently.
  • Force majeure declarations. Watch for these from manufacturers, particularly in petrochemicals, aluminium and semiconductors. Each declaration signals that inventories have been exhausted and production is being curtailed.
  • Food price inflation. If fertiliser shortages persist into the planting season, the impact on food prices could extend well into 2027. The FAO’s three-month warning window is the key timeline to monitor.
  • Semiconductor lead times. If the helium squeeze lasts beyond 90 days, chip production delays could begin affecting AI infrastructure buildouts, consumer electronics availability and technology stock valuations.
  • Substitution and adaptation. Some industries can switch feedstocks or suppliers. Others, like semiconductor fabs that depend on helium, have very limited alternatives. The sectors with the fewest substitution options are the most vulnerable to sustained price increases.
  • Gulf economic stability. If desalination plants or power infrastructure in Gulf states suffer further damage, the consequences for regional economic activity could be severe, affecting everything from construction to financial services.

 

Sector Implications and DCSC

The Strait of Hormuz crisis is a powerful example of how a single disruption can ripple across dozens of apparently unconnected sectors. Dynamic Company Sector Classification system tracks over 1,500 sectors, giving investors the granularity to map their portfolio exposure against specific supply chains and identify risks that traditional sector classifications might miss.

Key sectors to explore beyond energy include semiconductors, fertilisers and agricultural chemicals, aluminium and metals, petrochemicals, plastics and polymers, food and agriculture, packaging, textiles, medical equipment, water infrastructure and automotive manufacturing. Understanding how these sectors connect to one another, and to the chokepoints that feed them, is one of the most effective ways to assess risk in the current environment.

Explore the full sector taxonomy at dcsc.ai.