Iran–US Strikes Around Strait of Hormuz Deepen Gulf Security Crisis, Squeezing Energy and Agri Supply Chains

Escalating strikes between the United States and Iran around the Strait of Hormuz are sharply curbing shipping activity, driving oil prices higher and raising freight and insurance costs. While the confrontation is primarily an energy and security crisis, second‑round effects are emerging across agricultural supply chains, fertiliser trade and food-import costs.

On July 14–16, the US reimposed a naval blockade on Iranian ports and expanded strikes on Iranian coastal and missile assets after Tehran attacked commercial shipping and US-linked targets, including sites around Bandar Abbas and Greater Tunb Island, key locations near the Strait of Hormuz. Iran has in parallel framed the confrontation as a fight over control of the waterway, through which roughly a fifth of global oil and significant fertiliser volumes normally transit.

Introduction

The current escalation follows weeks of tit-for-tat attacks on commercial vessels and energy infrastructure in and around the Strait of Hormuz. The US Central Command has reported multiple rounds of strikes against Iranian coastal defence, drone, missile and maritime capabilities at ports including Bandar Abbas and islands positioned at the narrow mouth of the strait.

In response, Iran has fired on shipping, declared periods of "closure" for the strait and directed attacks toward US-linked facilities in neighbouring Gulf states, triggering air-defence alerts and regional military mobilisation. The result is a sharp drop in tanker and cargo transits, heightened risk premia and renewed volatility in energy benchmarks that underpin production and transport costs across global agricultural commodity markets.

Immediate Market Impact

Oil prices have risen for several consecutive sessions on the back of disrupted flows and renewed US–Iran hostilities. Brent crude has traded above $85 per barrel in recent sessions, up roughly 10–15% from early-July levels, while intraday spikes briefly pushed prices toward $87 as news of the blockade and fresh strikes broke. West Texas Intermediate has followed a similar trajectory.

Tanker tracking indicates a steep contraction in traffic through the Strait of Hormuz since the wider Gulf conflict erupted in late February, with Kpler data showing tanker transits down by around 90% at several points and continued diversion or idling of large crude and product carriers. The latest US blockade and Iranian retaliatory attacks are reinforcing shipowners’ reluctance to enter the area, further tightening vessel availability and pushing up freight and war-risk insurance premiums for all cargoes, including grains, sugar, edible oils and fertilisers routed via Gulf ports.

Supply Chain Disruptions

Port operations at Bandar Abbas and other Iranian facilities are being directly affected by strikes on naval and coastal infrastructure, while neighbouring Gulf ports face congestion, diversions and longer waiting times as vessels seek alternative routes or shelter. The US blockade of Iranian ports effectively removes a segment of regional berth and storage capacity from the market, tightening space for transshipment of both energy and bulk commodities.

Historically, the Strait of Hormuz has been a critical corridor for fertiliser exports from Gulf producers to Asia, Africa and Latin America. WTO analysis notes that fertiliser-related shipments through Hormuz fell to near-zero amid the early phases of the 2026 Gulf conflict, contributing to sharp rises in urea, DAP and potash prices. With the security situation deteriorating again and traffic once more heavily curtailed, importers face renewed risks of delayed fertiliser deliveries ahead of key planting windows.

Container and general cargo services are also affected, with some carriers diverting via longer Cape routes or reducing calls at Gulf ports. Longer sailing times, higher bunker costs and elevated insurance translate into higher landed costs for food and feed imports into the Middle East and South Asia, particularly for wheat, rice, vegetable oils and meat products that rely on just-in-time deliveries.

Commodities Potentially Affected

• Crude oil and refined fuels – Directly impacted by reduced tanker traffic and US–Iran strikes on coastal and naval assets, lifting benchmark prices and increasing bunker costs for all shipping.
• Fertilisers (urea, DAP, potash) – Gulf-based production and exports rely heavily on Hormuz; prior disruptions sent trade flows to near standstill and pushed global fertiliser prices sharply higher.
• Grains and oilseeds – Higher fuel and freight rates raise CIF costs for wheat, corn, barley and soy shipped to net-importing regions in MENA and South Asia; some cargoes may be delayed or rerouted.
• Sugar and rice – Key staples for Gulf and North African consumers; increased transport and insurance costs could widen import bills and pressure domestic price stability.
• Edible oils and oilseed meals – Shipping disruptions and higher bunker prices raise logistics costs for palm, sunflower and soybean oil flows transiting to or from the Gulf.

Regional Trade Implications

Major Gulf hydrocarbon and fertiliser exporters such as Qatar, Saudi Arabia and the UAE face elevated logistics costs and may need to adjust loading programmes, though some can partially mitigate exposure using Red Sea or overland routes. Iran, directly targeted by the blockade and strikes, is likely to see further erosion of its export capability, including any residual sanctioned oil and petrochemical flows.

Net food-importing countries in the Middle East and North Africa are particularly exposed to higher freight and insurance charges, which may cascade into domestic food price inflation. Asian buyers of Gulf-origin fertilisers and energy-intensive products could seek additional volumes from alternative suppliers in North Africa, Russia, North America or Southeast Asia, potentially reshaping trade patterns and price benchmarks.

Shipowners with flexible fleets able to redeploy away from the Gulf may benefit from higher spot rates on alternative long-haul routes, while charterers face tighter tonnage lists and more complex voyage planning. Traders with diversified origin options and hedged freight exposure are better positioned to arbitrage price differentials and manage supply risk.

Market Outlook

In the near term, commodity markets are likely to remain highly sensitive to further headlines on US–Iran military activity, the practical enforcement of the US blockade and any indication of additional strikes on ports, storage or shipping. Brent’s move back into the mid‑$80s, combined with a sharp increase in war-risk premia, points to sustained upward pressure on delivered costs for energy-intensive agri inputs and long-haul food trade.

Key indicators for traders include daily tanker and container transits through Hormuz, insurer stances on coverage, announced diversions by major carriers, and forward pricing for fertilisers into key import markets. Any diplomatic progress that secures safe passage could quickly cap energy prices and ease freight, but repeated breakdowns of prior arrangements suggest that volatility will persist.

CMB Market Insight

The intensifying confrontation around the Strait of Hormuz has evolved from a regional security flashpoint into a structural risk factor for global commodity logistics. Even without a complete halt in flows, reduced tanker traffic, higher bunker prices and rising insurance costs are tightening margins along food and fertiliser supply chains at a time when many importers are already managing elevated debt and currency pressures.

For agricultural traders, importers and processors, the episode underscores the need for diversified origin strategies, stronger freight and fuel hedging, and contingency planning for Gulf-related disruptions. Until safe, predictable passage through Hormuz is restored and verified by shipping and insurance markets, elevated logistics risk premia are likely to remain embedded in global agri and input prices.