Post: Strait of Hormuz Disruption Hits Energy, Fertilizer and Industrial Trade

Strait of hormuz: Disruption in the Strait of Hormuz has exposed the vulnerability of global trade to a single maritime chokepoint, with early data showing sharp falls in exports of energy, fertilizers, and industrial products. Exports of natural gas dropped by a staggering 95 percent. According to United Nations, the finding comes in analysis published by the International Trade Centre (ITC), a multilateral agency that has a joint mandate with the World Trade Organization (WTO) and UN trade and development body UNCTAD. The critical maritime corridor, located south of Iran, is responsible for around one quarter of global seaborne oil trade and a significant share of liquefied natural gas flows and fertilizers, including a third of globally traded urea. Since the military escalation in late February, reduced commercial passage, concerns over navigational safety, and higher transport and insurance costs have affected trade flows far beyond the region. Although recent lulls in the fighting have raised hopes th at shipping could resume more fully, traffic remains far below normal levels. The analysis focuses on 12 strategically important energy, fertilizer, and industrial products for which Hormuz-dependent economies are important global suppliers. This group comprises Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates. Trade data for April reveals that combined merchandise exports across all products from these economies declined by 21 percent in value. The ITC noted, however, that export values are also affected by sharp movements in international commodity prices triggered by the disruption itself. Therefore, changes in physical quantities provide complementary evidence on the extent of the disruption to actual trade flows. Across all 12 products, export volumes fell between April 2025 and April 2026. Combined export volumes declined by 54 percent, with liquified natural gas recording the steepest contraction at 95 percent. Urea exports declined by 83 percent, followed by methanol ( 80 percent) and ammonia (75 percent). Polymers of propylene (or polypropylene), used for plastic packaging in consumer goods, were the least affected, declining by 24 percent. The largest absolute losses were in energy products such as crude petroleum oil exports, which fell by 28 million tonnes, followed by refined petroleum oils and liquefied natural gas, which declined by 7.3 million tonnes and 5.5 million tonnes respectively. Sizeable falls in fertilizers, chemicals, plastics, and aluminium show that the disruption affected a broader range of industries and supply chains, the authors noted. Meanwhile, importing markets were not affected in the same way, depending on factors such as reliance on Hormuz suppliers, access to inventories and strategic reserves, domestic demand, and ability to source from alternative suppliers. Japan, for example, historically sourced 91 percent of its crude petroleum oil imports from Hormuz-dependent economies. In April, the country recorded a 64 percent decline in total imp orts. Other highly dependent markets such as the Republic of Korea and Malaysia faced the same situation. In contrast, Thailand recorded a 62 percent increase as refiners moved to secure additional cargoes from alternative suppliers and maintain supplies during the disruption. Alternative suppliers in fact increased shipments for 10 of the 12 selected products across all reporting markets, yet these gains fully offset lower imports from Hormuz-dependent economies only for ammonia and polymers of propylene. The finding suggests that trade diversion had begun but had not fully replaced disrupted supplies by April as some markets may have drawn on inventories or strategic reserves, increased domestic production where possible, or reduced consumption. The ITC update also examined other aspects of the crisis, including trade measures adopted in response to the disruption, such as policies aimed at ensuring adequate access to supplies, particularly of crude and refined oil.