A prolonged disruption to the global fertiliser and energy markets, specifically linked to the potential or actual closure of the Strait of Hormuz, could drive global cereal prices to unprecedented heights, resulting in catastrophic consequences for international food security and public health. This warning stems from a comprehensive new modelling study commissioned by the International Chamber of Commerce (ICC), which highlights the fragile nature of the global agricultural supply chain. According to the research, the most severe scenarios could see global cereal prices surge by as much as 81% above 2020 levels, creating a humanitarian crisis that would disproportionately affect the world’s most vulnerable populations.
The study, conducted by a multidisciplinary team of researchers from the University of Edinburgh, the University of Aberdeen, and Scotland’s Rural College (SRUC), provides a chilling look at how a localized geopolitical conflict can trigger a global domino effect. By tracing the flow of essential agricultural inputs and energy through one of the world’s most critical maritime chokepoints, the researchers have illustrated a direct link between regional instability and global mortality.
The Strait of Hormuz as a Global Agricultural Chokepoint
The Strait of Hormuz, a narrow waterway separating the Persian Gulf from the Gulf of Oman, is widely recognized as the world’s most important oil transit point. However, its role in the global food system is often overlooked. Prior to recent escalations and the threats of closure, the Persian Gulf producers who rely on this route accounted for approximately 40% of the global urea trade. Urea is a primary source of nitrogen, an essential nutrient for the production of staple crops like wheat, maize, and rice.
Beyond fertilisers, the Strait is a vital artery for energy, carrying nearly 20% of the world’s total oil supply and more than 20% of the global liquefied natural gas (LNG) trade. The production of nitrogen-based fertilisers is an energy-intensive process that relies heavily on natural gas as both a feedstock and a fuel source. Consequently, any disruption in the Strait of Hormuz creates a "double-hit" on agriculture: it simultaneously reduces the physical availability of fertilisers and drives up the cost of the energy required to produce and transport them.
The ICC modelling suggests that a sustained closure would lead to a reduction in nitrogen fertiliser use by approximately 37% globally. This drop in input use, combined with the rising costs of fuel for farm machinery and irrigation, is projected to slash cereal productivity by up to 10%. In a global market where supply and demand are already tightly balanced, such a contraction would lead to a sharp tightening of supply and a rapid escalation in prices.
A Timeline of Market Volatility and Demand Destruction
The current alarm raised by the ICC is not merely theoretical; it is informed by recent volatility in the fertiliser markets. While some observers have noted a recent decline in urea prices, the ICC warns that this should not be interpreted as a return to market normalcy. On the contrary, industry data suggests a more troubling underlying trend.
Between April and June of the current year, an estimated 3.7 million tonnes of urea demand was "destroyed" or deferred. This represents a 27% year-on-year decline in demand. This reduction was not caused by a surplus of supply but by "demand destruction"—a phenomenon where prices become so high that farmers and buyers simply step back from the market because they can no longer afford the inputs.
The chronology of this market stress suggests a dangerous cycle. As farmers reduce fertiliser application today, the yields of tomorrow’s harvests are compromised. When the next planting season arrives, the return of demand to a market with depleted stocks and ongoing supply constraints could cause prices to spike even more aggressively than before. The ICC emphasizes that the current lull in prices is a "false calm" that masks deep-seated structural vulnerabilities.
Impact on Households: The Geography of Vulnerability
The modelling results indicate that the shock to the food system would feed through with devastating speed to household consumers. In East Asia, the Pacific, and Sub-Saharan Africa, consumer food prices could rise nearly 70% above the 2020 baseline in a severe scenario. Unlike wealthier nations, where food accounts for a relatively small percentage of household expenditure, families in these regions often spend upwards of 50% to 70% of their income on basic nutrition.
For these populations, an 81% increase in cereal prices does not mean choosing a different brand; it means a drastic reduction in calorie consumption and the abandonment of dietary diversity. The research suggests that the resulting nutritional deficits would lead to a significant increase in the prevalence of underweight individuals and a surge in diet-related health complications.
Under the sustained severe scenario, the modelling predicts that the disruption could contribute to approximately one million additional dietary health-related deaths by the year 2030. Furthermore, it estimates that an additional 67 million people would be left underweight. The burden of this crisis would fall overwhelmingly on 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 burden. In contrast, higher-income regions, while facing inflation, would see little change in overall health outcomes due to their greater fiscal capacity and robust social safety nets.
Expert Analysis: The Chain Reaction from Conflict to Health
Dr. Jay Burns, the lead author of the study from the University of Edinburgh, describes the situation as a "chain reaction" that starts with geopolitical conflict and ends with human mortality. "The crisis centred on the Strait of Hormuz is creating a sequence of events: from conflict to nitrogen fertiliser and energy price spikes, and on to food security and human health," Dr. Burns stated.
His analysis highlights a growing concern in the field of "planetary health"—the idea that geopolitical and market shocks are now central to public health outcomes. In overconsuming countries, higher prices might lead to a modest reduction in excessive demand, which could have marginal health benefits for some. However, for the world’s poorest, the reality is a "compounding reduction" in both total energy intake and the quality of the diet.
The research also finds that even if trade flows were to recover gradually, the effects would be long-lasting. In scenarios where it takes five years for prices to return to pre-crisis levels, between 7 million and 16 million people would still be underweight by 2030. This is because disruptions to planting cycles and the depletion of grain inventories cannot be reversed overnight; the "echo" of a supply shock can persist for years in the form of market instability and compromised maternal and child health.
Institutional Responses and the Humanitarian Imperative
In response to these findings, ICC Secretary General John W.H. Denton AO has called for immediate international intervention. He argues that the free flow of fertilisers through the Strait of Hormuz must be viewed as a "global humanitarian imperative" rather than a mere commercial concern.
"The new research exposes the extraordinary risk that continued disruption in the Strait of Hormuz poses to global food systems," Denton said. He urged governments to move beyond viewing the situation through a purely security-focused lens. The ICC is advocating for the activation of temporary mechanisms—essentially "green corridors"—to facilitate the safe and predictable movement of essential agricultural nutrients.
The ICC’s proposal includes:
- Diplomatic De-escalation: A concerted effort to reach a durable agreement to keep the Strait of Hormuz open for commercial shipping, specifically for agricultural inputs and energy.
- Safe Passage Mechanisms: The implementation of international guarantees or naval escorts for vessels carrying fertilisers and related chemicals to ensure they can reach global markets before critical planting windows close.
- Financial Support: Coordinated financial assistance for vulnerable, import-dependent economies to help them absorb price shocks and maintain social protection programs.
- Market Transparency: Improved monitoring of fertiliser stocks and trade flows to prevent panic buying and hoarding, which can exacerbate price spikes.
Broad Implications for Global Stability
The implications of this study extend beyond health and economics; they touch on global political stability. History has shown that sharp increases in food prices are often the precursors to civil unrest, migration, and political upheaval. The "Arab Spring" of the early 2010s, for instance, was preceded by a significant spike in global grain prices.
By identifying the Strait of Hormuz as a single point of failure for both energy and food, the ICC research underscores the need for greater diversification in the global fertiliser supply chain. However, building new urea production facilities or developing alternative trade routes takes years of investment and planning. In the short term, the world remains tethered to the stability of this 21-mile-wide waterway.
As the international community grapples with various regional conflicts, the ICC study serves as a reminder that the costs of war and geopolitical brinkmanship are rarely confined to the combatants. In an interconnected global economy, a blockade in the Persian Gulf can lead to a funeral in Sub-Saharan Africa. The findings call for a shift in how global leaders perceive maritime security, placing food security at the heart of the geopolitical agenda to prevent a projected million deaths and a generational setback in the fight against global hunger.
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