President Donald Trump’s military campaign against Iran could snarl the global flow of chemicals needed to make everything from critical minerals and EV batteries to fertilizers and cleaning supplies.
The escalating conflict in recent days has effectively closed the Strait of Hormuz, a crucial passageway for oil and gas from the Persian Gulf. The waterway off Iran’s coast plays a crucial role in the global economy, and experts have warned it could take weeks to reopen and return to prewar traffic.
But the strait is more than a choke point for oil.
It’s also a critical pathway for a byproduct of oil and gas production: sulfur. Ships moving through the strait carry 24 percent of the world’s sulfur, a feedstock for sulfuric acid used to make metals like nickel and copper, as well as fertilizer and household cleaning products. Now that flow has screeched to a halt.
“I have heard that traders are already struggling to source any,” Ivanhoe Mines CEO Robert Friedland wrote in a post on X. “Sulphuric acid prices will therefore significantly increase across Africa … and if the disruption lasts longer than ~3 weeks, copper oxide operations will have to close as they’ve run out of acid.”
The Iran war is significantly driving up the cost of U.S. goods and complicating Trump’s push to tamp down on fears of inflation and affordability ahead of the midterms. While the national focus has largely remained on oil, the growing military conflict in the Middle East is slowly entangling a greater number of products.
Eric Byer, president and CEO of the Alliance for Chemical Distribution, said manufacturers based in Asia are already having to issue force majeure notices, which communicate that a contract cannot be fulfilled due to unforeseen circumstances, for a range of oil- and sulfuric-acid-based products.
“Sulfuric is a biggie,” Byer said. “It’s top of mind for our industry and a variety of different things,” which includes products from batteries to toilet bowl cleaners.
Several of the materials caught in the logjam have impacts — either directly or indirectly — on U.S. food production, including sulfur used to make phosphate fertilizer. While the U.S. sources sulfur mainly from Canada, for instance, price shocks related to the Persian Gulf ripple across international and domestic markets.
Around a third of the world’s fertilizer transits the Strait of Hormuz, according to the data company Kpler, with Qatar, Saudi Arabia and the United Arab Emirates as major sources. Vital fertilizer ingredients including urea and ammonia move through the region, and facilities need natural gas as a feedstock to make fertilizer.
The president of the American Farm Bureau Federation, Zippy Duvall, this week urged the Trump administration to offer protection to ships moving through the strait, citing the squeeze on fertilizer.
“These supply chain shocks are expected to drive already record-high input prices even higher at a time when farm margins are already extremely tight and many farmers are underwater,” Duvall said in a letter to Trump on Monday.
Rare earths, critical minerals
The escalating conflict in the Middle East is reinforcing the urgency the U.S. and its allies face to independently produce rare earths critical to weapon systems and motors, said Jack Baxter, a lead analyst for Bloomberg Intelligence.
But the U.S. has a long way to catch up.
Baxter co-authored a report that found supplies of rare earths outside of China will surge by 2030, but even that increase will still fall short of the demand in supply chains that Beijing dominates. That, in turn, could put pressure on companies poised to pump out rare earths outside of China, including U.S.-based MP Materials and Australia’s Lynas Rare Earths, according to Bloomberg Intelligence.
Producers of other minerals like copper and graphite are already feeling the pressure amid the growing conflict with Iran.
The flow of sulfur exports out of the Persian Gulf — which account for roughly half of global seaborne trade — is already being affected and could drive prices beyond prewar record highs, said Alon Olsha, a senior analyst in metals and mining at Bloomberg Intelligence.
“That matters for copper,” said Olsha. “In the African Copperbelt, sulfuric acid is essential for leaching, underpinning around 45% of [Democratic Republic of the Congo] output or 6% of global supply.”
It also matters for nickel. Indonesia, which produces more than 50 percent of global nickel, imports roughly 75 percent of its sulfur from the Middle East, according to the Oregon Group. Some high-pressure acid leaching plants hold only one to two months of sulfur inventory, according to the group, and sulfur prices were already high before the conflict.
A sulfur squeeze could also affect the production of mixed nickel-cobalt hydroxide precipitate, or MHP, which requires sulfur as a feedstock and is largely sourced from Middle Eastern nations, according to Benchmark. MHP is a feedstock for EV batteries.
Saudi Arabia was the largest exporter of sulfur to Indonesia last year, according to Benchmark, while the UAE, Qatar, Kuwait and Bahrain supplied large volumes of the commodity. Unlike oil and gas, sulfur cannot be moved through a pipeline and must be shipped as dry bulk freight. “With MHP prices already elevated in 2026 compared with 2025, shipping constraints in the Strait of Hormuz could exert further upward pressure by restricting supply once existing inventory is exhausted,” Benchmark analysts wrote.
An extended conflict could also push up natural graphite prices in the coming months due to rising shipping costs.
“The impact on synthetic graphite prices could be more severe, as petroleum coke is one of the foremost feedstocks in its production. As oil output falters, availability of this byproduct will tighten,” Benchmark wrote. “Broadly, the conflict is likely to raise input costs and disrupt raw material flows as well as retail EV demand.”
On borrowed time
Another chemical that Byer, with the Alliance for Chemical Distribution, said he is paying attention to is citric acid, commonly known for making sodas and candies sour, but also used to descale water.
Major supply chain issues haven’t hit U.S. chemical manufacturers yet, he said. But they’re on borrowed time.
“If it stops in another week or so, I think we’ll be OK,” Byer said. But if the conflict persists through “the end of the month … then I think we’re going to have some significant issues,” he said.
Crude oil isn’t only an issue at gasoline pumps, it’s also the building block for plastics, paints, polyester clothing, some pharmaceuticals, construction materials, the list goes on.
“Oil-based products are in jeopardy of being limited or out of stock in the next few weeks, just because of the sheer crude factor,” Byer said.
A Goldman Sachs analysis projected that U.S. chemical manufacturers may even benefit from the disruption in the Middle East, because it can rely on cheaper domestic natural gas and other stockpiled energy supplies.
“I would say it’s a fairly correct assumption,” Byer said. “We have a fair amount of domestic product available. The problem is a lot of the manufacturing doesn’t happen here … and crude oil is key to the manufacturing segments in China and India.”
“Availability, the supply, versus turning it around and getting a manufacturer are two different things,” Byer said. “I think the supply could be a challenge.”
