📌 Key Takeaways
- Around 20% of global oil and petroleum product consumption and about 20% of global LNG trade moved through the Strait of Hormuz in 2024, making it one of the world’s single biggest energy chokepoints
- The IEA has described the current disruption as the largest oil supply shock in history, with Reuters reporting a March supply hit of about 8 million barrels per day.
- The shock is no longer just about crude. It is hitting diesel, LNG, aluminium, sulphur and sulphuric acid-linked mineral processing from nickel to copper.
💥 The closure has turned a chokepoint into the market
About 20 million barrels per day of crude, condensate and petroleum products moved through Hormuz in 2024, equal to more than a quarter of global seaborne oil trade and roughly a fifth of global oil and product consumption. The same corridor also carried about 20% of global LNG trade, overwhelmingly from Qatar.
That is why this is not behaving like a routine geopolitical premium. The IEA sees the blockade triggering the largest disruption in oil-market history, with global supply down about 8 million barrels per day in March.
Physical barrels are already repricing hard. Oman crude futures hit a record $152.58 a barrel on March 16, while spot Omani crude briefly traded near $154 as buyers scrambled for non-Hormuz supply.
Spare pipeline capacity helps, but it does not replace the strait. Saudi exports through its East-West pipeline rose to 5.9 million bpd, with a target of 7 million bpd, while the UAE is increasing use of Fujairah-linked routes. But that is mitigation, not a solution. The market is still short seaborne barrels, especially the grades many Asian and European refiners were built to run.
🛢️ Why energy markets feel this first
Oil grabs the headlines, but diesel may be the faster transmission mechanism into the real economy. Diesel supply loss associated with the Hormuz disruption at 3 million to 4 million barrels per day, plus another 500,000 bpd from blocked Middle Eastern refinery exports. Europe looks especially exposed because it has leaned more heavily on Middle Eastern fuel after cutting Russian imports.
Gas is the second pressure point. Qatar accounted for nearly all LNG moving through Hormuz from the Gulf in 2024, averaging 9.3 billion cubic feet per day. Qatar had halted LNG output earlier this month, raising the risk of a broader gas shock that would hit Asia first but quickly spill into Europe through global cargo competition.
That matters for mining because energy is not just an input cost. It is embedded in every stage of the chain: blasting, hauling, refining, smelting and shipping.
⛏️ What does this mean for mineral markets?
The cleanest example is aluminium. Aluminium prices surged 12% to a four-year high of $3,546.50 per metric ton as Gulf producers rerouted exports and imports around the closure. The Gulf accounts for roughly 9% of global aluminium supply, and much of that metal normally moves to the US and Europe.
The more important story, though, may be sulphur.
Sulphur is a petroleum system by-product, and sulphuric acid is a critical reagent in metal processing. The USGS has long identified copper ore leaching as one of sulphuric acid’s largest end uses, while sulphuric acid prices had already surged 500% in roughly two and a half years before the latest Hormuz shock — to a market that was already tight before Gulf disruption tightened it further.
The Gulf disruption is also squeezing sulphur supply to Indonesia’s nickel sector, which produces more than 50% of global nickel and imports about 75% of its sulphur from the region. Sulphur prices were already around $500 a ton before the conflict and had risen another 10% to 15%.
That is the real strategic risk. If sulphur and sulphuric acid stay tight, this stops being only an oil story and becomes a nickel, copper and fertilizer story. HPAL nickel plants, oxide copper producers and any operation dependent on acid-intensive processing move closer to margin compression or outright production cuts.
🌾 Fertilizer
Fertilizer and agriculture sit directly in the blast radius because sulphur is not just a refinery by-product; it is a core input into phosphate fertilizers and a critical part of the wider crop nutrient chain. Any sustained disruption in Gulf energy flows therefore risks tightening sulphur and sulphuric acid supply at the same time farmers and fertilizer producers need stable volumes, pushing up input costs across agriculture. That matters well beyond the farm gate. Higher fertilizer costs feed into higher food prices, weaker planting economics, and greater pressure on already fragile import-dependent food systems. In other words, a closure of the Strait of Hormuz would not stay contained within oil and gas markets. It would move through fertilizers into agriculture, and from agriculture into inflation, trade balances, and food security.
📌 The bigger strategic narrative
The Strait of Hormuz closure is exposing a point investors often miss. Critical minerals are not insulated from energy geopolitics. They are built on top of it.
A sustained closure does not just raise the oil price. It rewires relative advantage across the industrial system. Energy-secure producers gain. Mineral projects with secure acid, feedstock and logistics gain. Everyone else pays more, waits longer, or both.
For policymakers, the lesson is simple: supply security is no longer just about owning ore. It is about controlling the fuel, gas, reagents and shipping lanes that turn ore into saleable metal. For investors, that is where the next repricing is likely to sit.