The 28 February 2026 pre-emptive strike jointly by the United States of America and Israel on Iran and the subsequent counterattacks on Gulf States, rendered the Strait of Hormuz, the vital global maritime energy trade route, vulnerable. By March 2, Iran pronounced that the Strait would be closed and that Iran would fire on any vessel attempting to pass. Economists are warning of a global recession should the Strait remain closed for more than a month, a likely scenario at the current trajectory.
Less than forty kilometres wide at its narrowest point, the Strait of Hormuz carries roughly one-fifth of the world’s oil and about a fifth of the global liquefied natural gas LNG trade. In the first week of the conflict, maritime traffic through the route plunged by almost 70%, rendering dozens of loaded tankers stranded inside the Persian Gulf. Crude oil prices have surged, with Brent crude touching $114 per barrel on 9 March 2026, the highest level since 2022. Analysts have warned that prolonged disruption could push prices well beyond $120, with some forecasts indicating up to $150 per barrel. This is not merely an energy crisis. It is a systemic shock to the chemical and industrial backbone of the global economy, one that is already triggering legal force majeure declarations, production halts and supply chain emergencies across multiple continents.
On the morning of March 4, 2026, Qatar Energy announced a “force majeure.” Citing “escalating armed conflict in the Middle East”, declaring it could no longer honour contracts for (LNG) – roughly one-fifth of global supply. At the time of the announcement, the Strait of Hormuz was not yet physically blockaded but commerce had already halted. Within hours, Aluminium Bahrain, the world’s largest smelter outside China, issued a similar notice, followed shortly by the Qatari aluminium smelter, Qatalum, which shut down entirely. The Norwegian co-owner, Hydro, has warned that resumption of production at the plant could take six to 12 months.
The Gulf is not simply an energy hub; it is one of the central chemical and industrial engines of the global economy that is now seizing.
When Qatar Energy invoked force majeure, it triggered a legal domino effect across supply chains. The Asian petrochemical sector followed suit, as Singapore’s PCS, Indonesia’s Chandra Asri, and South Korea’s Yeochun NCC issued similar declarations. When insurers designated the Gulf a “war-risk zone,” premiums surged from 0.05% to 1% of hull value, meaning a $500,000 premium for a $50 million vessel, up from $25,000. Some insurers now demand up to $5 million for tankers carrying Iranian oil.
Agricultural squeeze
While most economists and news reports focus on the oil price surge and the consequential rise in cost of living, few recognise the broader impact on other sectors of the economy. The Gulf supplies the chemical foundation of modern agriculture: ammonia and urea for fertilisers, sulphur for phosphate processing and the petrochemical feedstocks for pesticides and herbicides. South Africa’s agricultural sector has already absorbed significant input cost inflation because of an increase in domestic fertiliser prices from 2021 to 2025. These increases were driven by a combination of elevated international prices and rand depreciation against the dollar, amplifying import costs for raw materials.
While oil shocks move markets in hours, agricultural shocks move harvests in seasons. By the time food price inflation appears in government statistics, the planting decisions that caused it will be irreversible, impacting directly on food security. For import-dependent regions, food insecurity is expected within months, not years.
Health infrastructure
Few sectors reveal the invisible reach of Gulf petrochemicals more clearly than healthcare. The pharmaceutical industry depends on petrochemical-derived feedstocks for Active Pharmaceutical Ingredients, solvents and speciality intermediaries. Packaging materials, plastic resins, polymers, glass and aluminium, face immediate constraints but the most critical vulnerability lies in the helium extracted from natural gas processing as an essential gas for cooling superconducting magnets in MRI scanners, spectrometers, cryostats, and imaging devices. Qatar supplies roughly 30% of global helium, hosting one of only two plants in the world that produce semiconductor-grade helium. A disruption in helium supply would force hospitals to postpone diagnostic procedures, delay cancer treatments, and cancel neurological assessments. The gas is also irreplaceable in semiconductor fabrication, where it maintains ultra-clean environments for chip production, vital to data centres and technology, and in aerospace, where it pressurises rocket fuel tanks.
The constraint is not unique to advanced diagnostics. India, which supplies a substantial portion of South Africa’s generic medicines, faces rising freight costs for Active Pharmaceutical Ingredient imports from China and shipping line surcharges of 25% for Gulf routes, or outright cargo refusals. The drugs may be available in Indian warehouses but would be difficult to reach port at a viable cost. For a country dependent on consistent supplies of antiretrovirals, antimalarials, and insulin, this represents a public health risk layered atop economic disruption.
Textiles
Beyond food and health, the Gulf supplies the physical fabric of daily life. Synthetic fibres constitute 64% of global textile production, with polyester alone accounting for 54% of the market. These fibres are manufactured from petroleum-derived chemicals through polymerisation processes. Apart from clothing and textiles, the furniture industry faces immediate pressure. Upholstery foams, synthetic fabrics, varnishes and adhesives all derive from petrochemical feedstocks. A South African furniture manufacturer relying on imported polyurethane foam, derived from Gulf petrochemical complexes, faces either supply interruption or 40-60% price increases as alternative suppliers in Europe and Asia face identical shortages.
Construction materials face parallel constraints. Epoxy resins are essential for construction coatings, adhesives and wind turbine blades. Soda ash, used in glass manufacturing and solar panel production, represents another vulnerability. Titanium dioxide, the pigment that makes paint white and sunscreen protective, relies on sulphate and chloride processes tied to petrochemical supply chains.
Aluminium production, concentrated in Gulf smelters powered by natural gas, accounts for roughly 10% of global refined supply. The metal is foundational to power transmission cables, renewable energy equipment and packaging. The force majeure declarations from Qatalum and Aluminium Bahrain signal constraints that will propagate into electrical infrastructure and consumer goods packaging within months.
The geography of vulnerability
An interconnected world has rendered us interdependent but also vulnerable to shock across economic geographies, forcing distinct national responses.
China faces a particularly complex dilemma. As the world’s largest manufacturing economy, China relies on Gulf oil for roughly 14% of its crude imports and Qatari LNG for an increasing share of its energy mix. Zhejiang Petroleum and Chemical, partly owned by Saudi Aramco, has already shut down 200,000-barrel-per-day crude distillation units and moved up scheduled maintenance. Beijing must now choose between drawing down strategic petroleum reserves, accelerating purchases from Russia at premium prices, or accepting manufacturing slowdowns that would ripple through global supply chains. China’s response will likely involve all three: strategic reserve releases to stabilise domestic prices, discounted Russian crude purchases despite quality and logistical challenges, and targeted manufacturing subsidies to maintain employment. The longer the crisis persists, the more aggressively China will push for diplomatic resolution while simultaneously accelerating its long-term strategic pivot away from Gulf energy dependence.
India confronts an equally severe challenge. The country imports roughly 85% of its crude oil, with significant volumes transiting the Strait of Hormuz. More critically, India supplies nearly 40% of Africa’s generic medicines and depends on Gulf petrochemicals for pharmaceutical intermediates. The Indian government has already faced domestic political pressure over fertiliser prices; a sustained Gulf disruption would force emergency procurement from alternative suppliers, likely at 30-50% premiums, while accelerating its domestic urea production expansion. New Delhi’s response will likely combine diplomatic pressure for the Strait reopening, emergency supply agreements with alternate suppliers, and temporary export restrictions on critical pharmaceuticals to preserve domestic stocks – measures that would further strain African healthcare systems dependent on Indian generics.
In Europe, the crisis manifests as an energy cost emergency. Since the loss of Russian gas supplies due to the war in Ukraine, European economies have increasingly turned to LNG imports from the Gulf. A sustained disruption threatens energy-intensive industries.
For South Africa, the crisis manifests as import affordability and availability squeeze. When supply chains tighten, the result is rising production costs, currency pressure and physical shortage.
South Africa faces a looming “gas cliff” as Mozambique’s Pande and Temane fields are projected to cease supply by July 2028, threatening industries that contribute up to 5% of national GDP and placing approximately 100,000 jobs at risk. The SA government had been in discussions with Qatar to secure LNG imports, now suspended by the force majeure declarations. A sustained closure of the Strait would force South Africa to compete for alternate LNG supplies in an already constrained global market, driving energy costs higher.
The mining sector, responsible for roughly 7.5% of GDP, faces particular pressure. While recent months have seen temporary relief from lower crude oil prices, a sustained closure of Hormuz would reverse the temporary cost relief.
The diplomatic imperative
The multilateral system has been rendered defunct as the rule of law has been ignored in the interests of hegemony. The United Nations Security Council remains mummified by the use of the veto, failing to address and meaningfully implement international norms and principles. Few countries have found the space to offer mediation after the total discard of the Omani-led process ahead of the pre-emptive strike on Iran. While there are fears of escalation and the embroilment of more countries in the war, the economic pressure points are precisely the incentives why major powers will be compelled to intervene diplomatically to mediate between the warring parties and deescalate the tensions in the Gulf. The region sits at the intersection of lucrative markets beyond just energy and alternate sources may not immediately mitigate against a global economic collapse. A prolonged conflict threatens not only regional stability but the functioning of the global economy itself.
The same countries that may hesitate to intervene militarily have strong reasons to push urgently for diplomatic solutions. Their economies depend on it. The true front line of this conflict may not lie in the Gulf alone; it lies in the fragile economic system that connects industries and markets across the globe. The longer that system remains under strain, the more input costs surge, the stronger the pressure will be for the war to end.
Zeenat Adam is a former diplomat and political analyst.
An interconnected world has rendered us interdependent but also vulnerable to shock across economic geographies, forcing distinct national responses
