Recent Passage of Indian Tanker Amid Tensions
Recently, an Indian tanker transporting liquefied petroleum gas (LPG) garnered significant attention as it traversed the Strait of Hormuz. Crowds gathered to witness the event, captivated by the live broadcast that reported on its journey.
“The position was received 8 minutes ago. It’s currently moving at 12.5 knots, heading 154 degrees. The Indian ETA is noted as tomorrow at 9:30 PM,” a journalist announced during the live commentary, utilizing a tracking app for updates.
As the tanker progressed, a video emerged showing it escorted by the Indian Navy through the Gulf of Oman.
The excitement surrounding the ship isn’t surprising, given the backdrop of war in Iran and the Iranian government’s significant shutdowns affecting key shipping routes. Notably, the Strait of Hormuz isn’t just pivotal for crude oil and liquefied natural gas (LNG); it has also halted shipments of various essential goods.
Even if the conflict resolves, there’s a concern that markets may take a while to stabilize. The Iranian attack has severely damaged regional infrastructure. While Iran asserts “sovereignty” over the strait, the U.S. maintains that reopening is crucial for any ceasefire.
LPG Impacted
The latest reports highlight that LPG is the refined product facing the brunt of the Hormuz blockade. LPG, a blend of propane, butane, and other gases, is crucial for household heating, cooking, and fuel purposes.
In India, this shortage has made headlines as people resort to alternatives like coal and firewood for cooking. India relies on the Middle East for about 90% of its LPG imports, affecting millions.
But it’s not just India feeling the pinch. In 2025, China became the second-largest LPG importer via the Strait of Hormuz, seeking to diversify supplies amid trade tensions with the U.S. Analysts indicate that LPG prices in China reached a 12-year high this April. Much of its LPG comes from Iran, necessary for both households and the petrochemical industry, leaving it susceptible to fluctuations in global demand.
Aside from the U.S. and Persian Gulf nations, Canada, Argentina, and Russia are other exporting countries. Russia is now focused on sales to Central Asia, a shift triggered by European sanctions after its invasion of Ukraine.
Fertilizer Concerns
While some are struggling with cooking fuel shortages, the food supply is also becoming a concern. The Persian Gulf is a significant supplier of fertilizers, prompting warnings from the United Nations.
It highlighted that even slight cost increases could push vulnerable families to dire situations, forewarning of potential record hunger levels.
About 30% of global fertilizer trade passes through the Strait of Hormuz. Maritime information companies report that 86% of vessels transporting fertilizers from the Persian Gulf to East Africa have halted operations.
Analysis from ING suggests “soaring fertilizer prices” will impact global wheat and corn production. While many Northern Hemisphere producers maintain ample supplies ahead of spring planting, protracted crises could complicate planting decisions later in the year, especially for regions in Asia and Africa that rely on fertilizers.
A significant amount, nearly 50%, of global sulfur transport also occurs through the Strait of Hormuz. Sulfur, a byproduct from oil and gas processing, is integral in producing phosphate fertilizers. Meanwhile, potash, another key fertilizer ingredient, is predominantly produced by Russia, which is now capitalizing on market dynamics given the Hormuz closure.
Aluminum Supply Issues
Iran’s strikes on major aluminum smelters in the UAE and Bahrain have exacerbated global supply challenges already linked to the Hormuz blockade.
While the full extent of the damage remains unclear, ongoing supply risks could linger even if shipping returns to normal levels. Experts caution that restarting smelters could be costly and complex, further straining an already limited market.
Aluminum is crucial in various industries, particularly in automobiles and packaging. The U.S. imports over 20% of its aluminum from this region, where Gulf states account for about 10% of the global supply.
The losses won’t be easily absorbed. Notably, over half of global production occurs in China, with that material being entirely consumed there. Conversely, more than 80% of Gulf aluminum is exported, making it a vital supplier. Since U.S. and Israeli airstrikes on Iran began on February 28, aluminum prices have surged by approximately 11%, marking the highest levels seen since early 2022.
Helium Supply Concerns
Qatar provides about a third of the world’s helium supply, crucial for cooling in technologies such as semiconductors and MRI scanners. Though prices are on the rise, major Asian producers claim they have adequate short-term stocks. South Korea’s Energy Minister recently stated no disruptions are anticipated for the next two months, and Taiwan echoed this sentiment.
However, potential long-term helium issues loom. Damage to Qatari LNG facilities due to Iranian attacks could take up to five years to fully resolve, according to local authorities.
The U.S., Algeria, and Russia also produce helium, with the last facing export challenges due to sanctions from the U.S. and EU.
This scenario reflects only a portion of the goods transported from the Persian Gulf to global markets, which also include naphtha, jet fuel, and iron ore pellets.
