The United States and Israel’s war on Iran has transformed the Strait of Hormuz from a long recognized geopolitical flashpoint into the epicenter of a global economic shock. Mühdan Sağlam and Günbey Korkmaz of The Economic Policy Research Foundation of Turkiye, one of Turkey’s largest non-partisan research organizations, make clear in a new report that this narrow waterway is not simply a transit route for oil tankers but a structural pillar of the world economy. “The Strait of Hormuz has once again emerged as one of the most critical chokepoints in the global energy system,” they wrote.
When Iran’s attacks on US bases and Gulf energy infrastructure triggered a de facto closure of the strait, insurers and shipping companies pulled back almost immediately, freezing the movement of roughly 20% of global oil supplies. The world has suddenly found itself confronting a supply gap that even the International Energy Agency’s release of 400 million barrels from strategic reserves could not meaningfully offset. The report notes that “market actors are prioritizing the fundamental uncertainty regarding the reopening of the Strait over the prospect of temporary supply injections,” a dynamic that has fueled extreme volatility, with oil prices swinging between $85 and $120 per barrel.
But the crisis is not confined to crude oil. Hormuz is the artery through which the Middle East exports the petrochemicals, industrial gases, and refined products that underpin global manufacturing. The report describes it as a “multi-layered chemical supply artery,” and the data bear that out. The Middle East supplies nearly half of global polyethylene exports, and more than 80% of that volume depends on Hormuz. When tankers stopped moving, polypropylene prices in China jumped almost 6% in a single day, methanol futures surged more than 10%, and the shutdown of Qatar’s LNG and helium facilities removed one third of the global helium supply. That disruption alone has rippled into semiconductor production and medical imaging, two sectors that rely heavily on stable helium flows. Meanwhile, refined products such as LPG, naphtha, condensate, diesel, and jet fuel have tightened sharply, pushing Asian airfares up by as much as $125 and driving global logistics costs higher.
The fertilizer market has been hit just as hard. Roughly one third of global seaborne fertilizer trade passes through Hormuz, and the sudden blockage has pushed urea prices up 10% in a week, with major hubs like New Orleans seeing spikes from $516 to $683 per ton. S&P Global estimates that fertilizer prices rose 38% between February 28 and March 9. Because fertilizer shocks translate into food inflation with a lag, the report warns that the world may be on the cusp of a broader food price surge.
Turkey, which is not directly dependent on Gulf oil, is an example of how the crisis presents a complex mix of vulnerabilities. Turkey’s industrial and agricultural sectors rely heavily on Gulf origin raw materials. Turkey imports up to a $1 billion worth of aluminum from Gulf states each year, $2 billion in plastic raw materials, a fifth of its helium from Qatar, and as much as 40% of its monoethylene glycol — an essential textile input — from Saudi Arabia and Qatar. These materials feed export driven industries such as automotive components, packaging, and especially textiles, a sector worth $30 billion annually. Rising input costs threaten to erode Turkey’s competitiveness in European markets at a moment when global demand is already softening.
Agriculture faces similar pressures. Turkey consumes seven million tons of fertilizer annually and imports four to five million tons, with Gulf suppliers providing up to a quarter of nitrogen based fertilizers. With Brent crude hovering near $90, fertilizer costs are rising quickly. The government has responded by suspending urea exports, reducing import tariffs to zero, and increasing stockpiles to protect domestic supply, but the report suggests these measures can only partially cushion the blow.
The logistics dimension is equally severe. War risk insurance premiums for ships transiting the Gulf have jumped from 0.25% to as high as 3% of vessel value. LNG tanker rates have surged 600%, and global container indices are climbing. These pressures raise Turkey’s import costs and squeeze export margins. Yet the crisis also underscores Turkey’s geographic advantage: its ability to reach European markets in three to seven days by road or short sea shipping positions it as a potential near-shoring hub at a time when companies are reassessing supply chain risk.
Energy security meanwhile remains a looming concern. Turkey relies on Iran for 13% of its natural gas imports, and any prolonged disruption could strain domestic supply. The country’s LNG infrastructure and storage capacity offer some buffers, but the macroeconomic implications are stark. Every $10 increase in global energy prices adds roughly $5 billion to Turkey’s current account deficit. With oil stabilizing near $100, the fiscal pressure is mounting.
The report claims that the crisis exposes a deeper structural fragility in the global economy. As the authors write, “Defining the Strait of Hormuz merely as an energy route is an analytical oversight.”
Modern economies depend on a dense web of petrochemicals, fertilizers, industrial gases, and metals that all converge on this single chokepoint. Until supply chains diversify and redundancy is built into the system, the Strait of Hormuz will remain a single point of failure capable of sending shockwaves across continents.
