The Iran war has severely disrupted global oil and gas supplies, pushing energy prices higher and raising costs for drivers. But the crisis is also triggering a range of less obvious shortages and price spikes that could touch everyday life.
Governments and businesses are already responding. South Korea’s president urged citizens to take shorter showers to save energy. In India, some restaurants have dropped dishes such as butter chicken because long simmering times are difficult amid cooking gas shortages. The Philippines asked officials to reduce electricity use by favoring stairs over elevators.
Aluminum: cans, cars and more
Aluminum recently reached a four-year high after Iran struck two large smelters in the Middle East that supplied major volumes to global markets, including the U.S. Aluminum is on the U.S. list of 60 critical minerals and is widely used for beer and soda cans, car parts and packaging.
Helium: balloons to chips and MRIs
Although the U.S. is the biggest helium exporter, Qatar supplies roughly a third of global helium and has halted production and shipments because of the blockade through the Strait of Hormuz. The shortage is being felt most in South Korea and Taiwan. Helium is essential for MRI scanners, rocket systems and in semiconductor manufacturing. Scotten W. Jones of TechInsights warns that modest price rises are manageable for chip makers, but extreme spikes could become a serious problem.
Fertilizer and food production
About a third of fertilizer shipped globally transits the Strait of Hormuz, since Gulf countries are major producers. Natural gas shortages have forced some fertilizer plants in India, Bangladesh and Pakistan to halt production, contributing to a roughly 25% jump in fertilizer prices as farmers in the U.S. begin planting corn. Pennsylvania farmer Rick Telesz says his nitrogen fertilizer cost rose from $500 to $850 a ton since the war began, forcing him to plan for at least a 30% cut in fertilizer use. The Fertilizer Institute expects American farmers to face a shortfall of about 2 million tons this spring, which will likely reduce plantings and weigh on global food output over the coming seasons.
Mortgage rates rise
The conflict has increased uncertainty in financial markets and pushed up borrowing costs, including mortgage rates. After briefly dipping below 6% for the average 30-year fixed mortgage, rates climbed back to just under 6.5%. Mortgage rates typically follow 10-year Treasury yields, which have risen amid the war-driven risk premium.
Sulfur and batteries
Sulfur — a byproduct of oil refining — is used in many industrial processes and in components for batteries and semiconductors. Because significant amounts of sulfur move through Hormuz, shipping disruptions could push sulfur prices higher, potentially increasing costs in battery supply chains. Unlike oil or gas, sulfur cannot be easily rerouted through pipelines, making supply adjustments slower.
Petrochemicals and plastics
Oil is also a feedstock for petrochemicals and plastics. Persian Gulf producers supply many Asian factories that, in turn, produce plastics and chemical intermediates for global markets. Even U.S. producers are feeling price pressure. Industry leaders warn petrochemical supply chains could take months to clear backlogs even if the strait reopens quickly, and shortages of plastic pellets and rising material costs are expected across industries.
Cooking gas shortages in India
Natural gas shortages in India are affecting households, restaurants and factories. Some people are stockpiling gas canisters, while restaurants have temporarily closed or raised prices because of limited cooking gas supplies.
The war’s effects extend far beyond fuel prices at the pump. Disruptions to shipping routes and supplies of oil-related byproducts are rippling through industries — from beverages and balloons to semiconductors, farming and housing markets — and may continue to influence costs and availability in the months ahead.
— Reporting from Lilly Quiroz, Camila Domonoske, Scott Horsley, Stephan Bisaha, Fatma Tanis, Omkar Khandekar and Frank Morris
— Graphics by Brent Jones