One Strait. Six Kill Chains.
When Iran closed the Strait of Hormuz on March 2, 2026, the world's attention went to oil prices. Brent hit $126. That's the headline. But crude is only one of at least six parallel supply chains that run through this 21-mile bottleneck — and the second- and third-order effects are still propagating through the global economy a month later.
This is a map of what actually flows through Hormuz, where it goes, and who is exposed. Not abstractions. Actual companies, actual volumes, actual dependencies.
Chain 1: Crude Oil — The Headline
This is the flow everyone sees. Twenty million barrels per day — roughly 20% of global seaborne oil trade — transited the Strait before the closure. Eighty-four percent of that was bound for Asia.
| Country | % Oil via Hormuz | Net Oil Imports (% GDP) | Key Exposure |
|---|---|---|---|
| Japan | ~70% | — | Requested SPR release; awaiting Iranian clearance |
| India | ~60% | — | Largest combined energy exposure (oil + LNG + ammonia) |
| China | ~40% | — | Buys 80% of Iranian crude; secured selective transit |
| Thailand | — | 4.7% | Highest net oil import as % of GDP in Asia |
| South Korea | — | 2.7% | Vulnerable on current account; chip fabs at energy risk |
The mitigation: the IEA coordinated release of 400 million barrels from strategic reserves. Saudi Arabia rerouted ~5M bpd through its East-West Pipeline to Yanbu on the Red Sea. But that pipeline maxes at 7M bpd total — you can't replace 20M bpd of strait capacity with a single pipe.
Chain 2: LNG — The Silent Killer
Twenty percent of global LNG supply flowed through Hormuz. Qatar — the world's largest LNG exporter — declared force majeure after Iranian drone strikes hit Ras Laffan, its primary export terminal. QatarEnergy estimated repairs could take three to five years.
The LNG dependency map is brutal:
Taiwan is the single most consequential LNG dependency. TSMC alone consumes ~9-10% of Taiwan's total electricity, and the island's power grid runs heavily on LNG. Morgan Stanley flagged the "11-day LNG cliff" — once reserves deplete, Taiwan faces rolling blackouts, and with them, disruption to 90% of the world's advanced semiconductor manufacturing.
Chain 3: Naphtha → Petrochemicals — The Margin Destruction
Thirty percent of global naphtha flows through Hormuz. Naphtha is the primary feedstock for Asian steam crackers, which produce ethylene and propylene — the building blocks of plastics, packaging, automotive components, and medical devices.
Naphtha has surged to $1,000/mt. The result:
| Company | Action | Impact |
|---|---|---|
| LG Chem | Cut crackers to minimum rates | Yeosu + Daesan crackers at floor |
| Mitsubishi Chemical | Reduced output to avoid shutdown | Ibaraki cracker near minimum |
| LyondellBasell (LYB) | Declared force majeure | European polymer lines halted |
| Lanxess | Hiked prices 35-50% | Flame retardants, plasticizers |
Chain 4: Helium → Semiconductor Fabs — The Hidden Dependency
This is the chain that nobody was modeling. Qatar supplies one-third of the world's helium as a byproduct of natural gas processing at Ras Laffan. Ultra-pure helium is essential for semiconductor wafer manufacturing — it's used in cooling, leak detection, and as a carrier gas in lithography.
When Iranian strikes destroyed Ras Laffan, helium shipments stopped. The price of ultra-pure helium doubled. Samsung and SK Hynix went on high alert. Korean chip fabs began rationing supplies.
Iran didn't need to strike a single chip factory. It choked the materials that chip factories need to run.
The threat model here is fundamentally different from anything the semiconductor supply chain has faced. Previous concerns focused on direct risks to Taiwan — invasion, earthquake, power outage. Hormuz revealed an indirect attack surface: cut off helium and sulfuric acid (see Chain 5), and even fabs with stable power begin to degrade.
Chain 5: Sulfur → Copper & Nickel Mining — The Mineral Chain
Ninety-two percent of global sulfur is a byproduct of oil refining and gas processing. Half of all seaborne sulfur trade passes through Hormuz. When Gulf refining shut down, the sulfur supply cratered — and with it, sulfuric acid production.
Sulfuric acid is the reagent used in leaching operations to extract copper and cobalt from ore. The dependencies:
This chain terminates in EV batteries, defense electronics, and power grid infrastructure. Cobalt from the DRC feeds battery cathodes for Tesla, BYD, and every other EV maker. Indonesian nickel feeds stainless steel and battery-grade nickel sulfate. The sulfur shortage cascades into critical mineral extraction, which cascades into electrification timelines and defense procurement.
Chain 6: Urea & Ammonia → Food Security
The Gulf region produces half the world's urea and 30% of ammonia. One-third of global fertilizer trade transited Hormuz. Qatar's QAFCO — 5.6 million tons/year of urea capacity — shut down entirely.
Urea prices have surged from $475 to $680/mt. Thirty-eight percent of global nitrate-based fertilizer supply and 20% of phosphate supply are disrupted. India downgraded its fertilizer sector to secondary gas allocation priority, losing ~800,000 tons of monthly urea production.
The timing is catastrophic: this hit during spring planting season in the Northern Hemisphere. Iran agreed on March 27 to allow humanitarian and fertilizer shipments, but the damage to planting schedules may already be locked in.
The Exposure Map
| Chain | At Risk | Insulated / Benefiting |
|---|---|---|
| Crude Oil | BP, SHEL (Gulf JVs halted); Asian importers | XOM, CVX, VLO, PBF, MPC |
| LNG | Pakistan, Bangladesh power; Taiwan grid | US LNG exporters (Cheniere) |
| Petrochemicals | LYB, LG Chem, Mitsubishi Chem, Lanxess | DOW (ethane-fed), BASF (flex-feed) |
| Semiconductors | Samsung, SK Hynix (helium); TSMC (LNG→power) | Intel (US fabs, US helium) |
| Critical Minerals | DRC copper/cobalt miners; Indonesia HPAL | Chile/Peru copper (non-HPAL) |
| Fertilizer | Indian/SE Asian farmers; QAFCO | CF Industries (US nitrogen) |
What Happens Next
President Trump extended the deadline for Iran to reopen the Strait to April 6, saying talks are "going very well." Even if the Strait reopens tomorrow, Dow's CEO estimates 250-275 days to unwind the disruption. Ras Laffan repairs could take years. The structural damage to Gulf LNG and helium supply is not a pricing event — it's a reconfiguration of global supply chains.
The Dallas Fed estimates a one-quarter closure would lower global real GDP growth by 2.9 percentage points annualized in Q2 2026. If closure extends through summer, analysts warn of outright global recession.
This is the most significant chokepoint failure in the history of global supply chains. Not because of the oil — we have strategic reserves and alternative pipelines for that. Because of the other five chains that nobody built contingency plans for.
Sources: Wikipedia, Dallas Fed, UNCTAD, Fortune, Morgan Stanley via Yahoo Finance, BusinessToday, Anadolu Agency