A prolonged disruption to the global fertiliser and energy markets, specifically linked to the potential closure or restricted access to the Strait of Hormuz, could drive global cereal prices to unprecedented levels, creating a humanitarian crisis of significant proportions. According to new economic modelling commissioned by the International Chamber of Commerce (ICC), such a disruption would not only destabilize international trade but would also lead to severe consequences for global food security and public health. The study, which examines the interconnected nature of modern supply chains, warns that the most vulnerable populations in the Global South would bear the heaviest burden of this geopolitical instability.
In the most severe scenario outlined by the research, global cereal prices are projected to rise by as much as 81% above 2020 levels. This price shock is expected to transmit rapidly through the global economy, affecting consumer markets far removed from the immediate geography of the Middle East. Households in East Asia, the Pacific, and Sub-Saharan Africa are particularly at risk, with consumer food prices in these regions potentially rising nearly 70% above the 2020 baseline. The research highlights a "chain reaction" where the scarcity of energy and agricultural inputs leads directly to higher costs at the grocery store and, ultimately, to a decline in human health outcomes.
The Strategic Importance of the Strait of Hormuz
The Strait of Hormuz, a narrow waterway between Oman and Iran, is widely considered the world’s most important oil transit chokepoint. However, the ICC-commissioned study emphasizes that its role in the global agricultural sector is equally critical, yet often overlooked. The Strait serves as a primary conduit for both energy and the chemical precursors necessary for modern farming.
Data provided in the study indicates that Persian Gulf producers who rely on this route account for approximately 40% of the global trade in urea, a key nitrogen-based fertiliser. Furthermore, the region is responsible for nearly 20% of the global oil supply and more than 20% of the global liquified natural gas (LNG) trade. Because nitrogen fertiliser production is an energy-intensive process—highly dependent on natural gas—any disruption to the flow of LNG or the direct shipment of urea creates an immediate supply vacuum in the global market.
The researchers, hailing from the University of Edinburgh, the University of Aberdeen, and Scotland’s Rural College (SRUC), utilized complex bio-economic modelling to trace how a blockage in the Strait would ripple through the food system. Their findings suggest that the resulting spike in energy and fertiliser costs would lead to a 37% reduction in nitrogen fertiliser use globally. This reduction in input would, in turn, cause cereal productivity to drop by up to 10%, tightening global supply at a time when demand continues to rise.
Humanitarian Impact and Public Health Consequences
The most alarming aspect of the modelling concerns the direct impact on human life. The study moves beyond abstract economic figures to quantify the potential loss of life and the increase in malnutrition resulting from market instability. For poorer households, even a modest increase in food prices translates into a necessary reduction in calorie consumption and a shift toward less diverse, nutrient-poor diets.
Under the sustained severe scenario, the modelling suggests that the shock to the food system could contribute to approximately one million additional dietary health-related deaths by the year 2030. Furthermore, the study estimates that an additional 67 million people could be left underweight due to the inability to afford or access sufficient nutrition.
The burden of these outcomes is not distributed equally. The research indicates that the global health impact would be overwhelmingly concentrated in lower-income regions. South Asia, Sub-Saharan Africa, and East Asia and the Pacific are expected to account for roughly 80% of the additional mortality and more than 90% of the additional underweight population. In contrast, higher-income regions, which possess greater fiscal buffers and social safety nets, would see very little change in their modelled health outcomes, despite facing higher prices.
Market Realities and "Demand Destruction"
The International Chamber of Commerce has expressed concern that recent fluctuations in fertiliser prices may give a false sense of security to global policymakers. ICC Secretary General John W.H. Denton AO noted that while urea prices have seen some recent declines, this should not be interpreted as a return to market normalcy.
"The new research exposes the extraordinary risk that continued disruption in the Strait of Hormuz poses to global food systems," Denton stated. He pointed to industry estimates suggesting that 3.7 million tonnes of urea demand was "destroyed or deferred" between April and June—a 27% year-on-year decline.
This "demand destruction" occurs when farmers and buyers are forced to step back from the market because prices have exceeded their purchasing power. It does not represent a stabilization of supply but rather a forced retreat that will inevitably lead to lower crop yields in the coming seasons. As demand inevitably returns ahead of planting windows, there is a significant risk of a secondary price spike that could further destabilize the market.
Expert Analysis of the Chain Reaction
Dr. Jay Burns, the lead author of the study from the University of Edinburgh, described the situation as a "chain reaction from conflict to nitrogen fertiliser and energy price spikes." According to Burns, the localized nature of a conflict in the Strait of Hormuz belies the global reach of its consequences.
"Our research highlights how those with the least capacity to absorb the resulting price shocks are likely to feel them most severely," Burns commented. He noted that while wealthier countries can use fiscal policy and social protection programs to shield their citizens, the world’s poorest households—who already spend a disproportionately large share of their income on food—face compounding reductions in both total calorie intake and dietary diversity.
The study also introduces a unique perspective on "overconsuming" countries. In some wealthier nations, higher food prices might lead to a modest reduction in excessive demand or food waste. However, these marginal benefits are vastly outweighed by the catastrophic impacts on the global poor. This dichotomy is becoming a central theme in "planetary health" discourse, where geopolitical shocks are increasingly recognized as primary drivers of global health inequality.
Long-term Recovery Scenarios
The research further explores the duration of the impact, finding that even a gradual recovery would leave lasting scars on global health. In scenarios where it takes five years for trade flows and prices to return to pre-crisis levels, the modelling suggests that between 7 million and 16 million people would still be classified as underweight in 2030.
The authors caution that simply reopening the Strait would not provide an immediate fix. Agricultural systems operate on seasonal cycles; a disruption to a single planting window can affect inventories and market expectations for years. The psychological impact on markets—leading to hoarding or speculative trading—can prolong the welfare and health consequences of instability long after the physical barriers to trade have been removed.
Calls for International Action
In light of these findings, the ICC is calling for urgent international intervention to decouple essential agricultural inputs from regional geopolitical conflicts. The organization has previously advocated for practical arrangements that would ensure the "safe and predictable movement" of fertilisers through the Strait of Hormuz, regardless of the political climate.
John Denton emphasized that restoring commercial shipments of these inputs must be viewed as a "global humanitarian imperative." The ICC is urging relevant governments to activate temporary mechanisms and "blue corridors" to facilitate the movement of nutrients before critical planting windows close. Furthermore, the ICC is calling for coordinated financial support for vulnerable, import-dependent economies to help them weather the volatility of the global commodities market.
The study serves as a stark reminder of the fragility of the global food system. By linking maritime security directly to public health outcomes, the researchers have provided a new framework for understanding the stakes of Middle Eastern stability. As the international community grapples with various geopolitical tensions, the message from the ICC is clear: the cost of inaction in the Strait of Hormuz will be measured not just in dollars or barrels of oil, but in human lives and the long-term health of the global population.
About the Author
