Fifty per cent of the world’s seaborne trade in sulphur passes through the Strait of Hormuz. So does 34 per cent of trade in crude oil, 29 per cent of liquefied petroleum gas, 19 per cent of liquefied natural gas, 19 per cent of refined oil products, 13 per cent of chemicals, including fertilisers, and nearly 10 per cent of aluminium. This is a chokepoint of the world economy. It is a place in which one starts a war only after careful consideration of goals, means and risks. That is not what happened before the assault on Iran on 28 February 2026. As a result, two months later, we are where we are. (See charts.)Yet where are we? The World Bank’s Commodity Markets Outlook, published on Tuesday, presents a detailed picture of the most important global outcome, namely its impact on supplies of all the stuff listed above. This war is a reminder that we do not live in an intangible world. Not only do we eat tangible food, wear tangible clothes and so on, but behind everything intangible — artificial intelligence and renewable energy included — lies an enormous quantity of tangible stuff, as the British writer Ed Conway showed in his book Material World.
So, if trade in vital stuff is blocked, unpleasant things quickly start to happen. As the World Bank notes, the initial impact of the closure of the strait was a global loss of 10.1mn barrels a day of oil in March. This was much larger than the impact of the Iranian revolution in 1979, the Arab oil embargo in 1973, Saddam Hussein’s invasion of Kuwait in 1990, or the Iran-Iraq war in the 1980s. It is the direct result of the closure, which reduced the number of tankers passing through the Strait of Hormuz from some 60 a day to close to zero after March 5. The inevitable outcome has been very large jumps in price: the price of oil per barrel jumped by $46 in March, far more than any other monthly rise in the 2000s. Between the beginning of the war and April 20, the price of Singapore jet fuel doubled, that of urea rose by 85 per cent, of Asian LNG futures by 46 per cent, and of Brent crude by 32 per cent.
What is next? Two big questions arise.