The disruption of oil tanker movement through the Strait of Hormuz has caused an immediate shortage of sulphur, leading to a sharp increase in global prices and threatening supply chains in agriculture and high-tech manufacturing. Because the Middle East produces roughly 24% of the world’s sulphur as a byproduct of oil and gas refining, the closure of this maritime chokepoint has stalled nearly 30% of global seaborne sulphur trade. This has forced spot prices in key hubs like China to surge past 4,700 CNY per tonne, a 23% increase in just one month, as industries struggle to find alternative sources for this essential raw material.
The Hidden Connection: From Oil to Industrial Chemicals
While the world often focuses on the price of gasoline, the movement of oil tankers is also the primary way the world gets its sulphur. Sulphur is not usually mined from the ground; instead, it is recovered at refineries during the process of cleaning “sour” crude oil and natural gas. When tankers stop moving through the Strait of Hormuz, refineries in the Persian Gulf are forced to slow down or stop production.
This creates an immediate “supply shock.” Without the constant flow of oil, there is no new sulphur being produced or shipped. “The Strait of Hormuz is not just an oil chokepoint; it is the lifeblood of the global sulphuric acid market,” explains Marcus Thorne, a senior commodity analyst. “When ships stop moving through this narrow passage, every industry that relies on acid—from fertilizer to car batteries—feels the impact within days.”
Agriculture on the Edge
The most visible impact of the sulphur shortage is in the world’s food supply. Roughly 50% to 60% of all sulphur is used to create sulfuric acid, which is then used to process phosphate rock into fertilizer. Countries like India and China, which have massive agricultural sectors, are particularly vulnerable.
India, for example, relies on imports for nearly 85% of its phosphate requirements. With the Strait effectively closed since late February 2026, the price of Diammonium Phosphate (DAP) fertilizer has already climbed by over 5%.
“If the Strait of Hormuz remains closed for an extended period, fertilizer trade in the Middle East would essentially come to a halt,” warned a board secretary at Liuguo Chemical in a recent industry report.
This timing is particularly bad for farmers in the Northern Hemisphere who are entering the spring planting season. If they cannot get affordable fertilizer now, it could lead to lower crop yields and higher food prices later this year.
Microchips and Modern Tech
Beyond the farm, the sulphur crisis is hitting the high-tech world. Ultra-pure sulfuric acid is a critical “cleaning agent” used in the semiconductor industry to etch and wash silicon wafers. While the amount of acid used per chip is small, there is no easy substitute for its effectiveness.
The global electronics supply chain is already under pressure from high demand for AI-capable chips. Even a minor increase in the cost of raw chemicals like sulphur can cause a “ripple effect.” For a industry that produces over 1 trillion chips a year, even a few cents added to the production cost of each wafer adds up to billions across the entire economy.
Metal Processing and the Green Energy Shift
Sulphur is also a “silent partner” in the transition to green energy. It is used in “acid leaching,” a process needed to extract nickel and copper from low-grade ores. Indonesia, which produces 60% of the world’s nickel for electric vehicle (EV) batteries, imports about 75% of its sulphur from the Middle East.
Reports from early March 2026 show that some nickel plants in Indonesia only have one to two months of sulphur inventory left. If they cannot secure new shipments, the production of EV batteries could slow down, making it harder and more expensive for car companies to meet their green energy goals.
What Happens Next?
Market participants are currently watching three key signs to see how bad the situation will get:
Shipping Duration: If the restrictions last more than two months, current inventories will run out.
Alternative Routes: Some companies are trying to move sulphur overland or via the Cape of Good Hope, but this adds 10 to 14 days to the journey and doubles insurance costs.
Refinery Output: If producers outside the Gulf, like Canada or the U.S., can increase their refining activity, they might fill some of the gap.
For now, sulphur has become a secondary but powerful driver of global inflation. While it may stay out of the headlines compared to the price of crude oil, its presence in almost every manufactured good makes it a critical variable for the global economy in 2026.
