The ongoing Gulf conflict may lead to shortages of materials such as aluminum and fertilizers

On March 28, Iran launched air strikes on two aluminum smelters in Gulf states—Bahrain Aluminum Company and UAE Aluminum Company—threatening global aluminum supply. Ongoing warfare and the blockade of the Strait of Hormuz are also disrupting exports of other industrial products from Gulf nations, triggering supply crises for raw materials used in manufacturing chips, plastics, fertilizers, and pharmaceuticals.

The Strait of Hormuz typically transports 20 million barrels of oil daily, accounting for 20% of global oil consumption. Meanwhile, Gulf countries are major producers of oil and gas derivatives as well as aluminum. These products are now experiencing severe shortages across factories worldwide.

Iran's Bombing of Aluminum Smelters

The recent Iranian airstrikes targeted two major aluminum smelters in the Gulf region: Bahrain Aluminum Company and UAE Aluminum Company—both among the world’s largest. The aluminum industry in the Gulf has thrived due to abundant and cheap local energy resources, supplying nearly 10% of global aluminum output, with Europe receiving up to 14% of its aluminum from this region.

The war has forced several large producers in the Gulf to halt contract deliveries. This is partly due to a lack of natural gas preventing normal operations, and partly due to damage caused by air raids. For instance, on March 15, Bahrain Aluminum Company announced a 19% reduction in production—a disaster for industries such as construction, aerospace, and automotive. The global aluminum market now faces potential supply disruption, sparking panic among manufacturers.

According to the Financial Times, the world’s largest automakers are scrambling to secure this metal essential for manufacturing wheels and engine components. Recently, Toyota Motor Corporation’s CEO Hiroya Sato expressed concern: "If this situation continues, we will face supply issues. We need to find alternative sources."

As reported by Automotive News, Japanese companies have already begun negotiations with certain Russian smelters.

Helium Shortages Affecting Chip Production

Another critical material produced in the Gulf is helium, an essential gas in semiconductor manufacturing—about one-third of global helium comes from Qatar.

The massive Ras Laffan helium production facility in Qatar is currently closed due to drone attacks. If this continues, global semiconductor manufacturers could soon face helium shortages, leading to reduced or even halted production lines.

Asia is the center of chip production and heavily depends on energy and gas supplies from the Middle East. In Taiwan, concerns are growing over whether TSMC—the world’s leading chipmaker—can continue operations.

TSMC’s chips power the global economy, from AI processors to automobiles, smartphones, and computers. With 97% of Taiwan’s energy dependent on imports, any prolonged Gulf conflict could trigger sharp helium price increases, potentially causing a collapse across the entire chip supply chain.

Plastic Shortage Crisis

The Gulf’s petrochemical industry converts oil and gas derivatives into basic chemical products, providing raw materials for multiple sectors—from automakers to sportswear manufacturers.

Lazard Bank analysts explain: "The Middle East is a primary global supplier of key petrochemical feedstocks such as methanol, ethylene glycol, polyethylene, and polypropylene—materials directly used in producing plastics, synthetic fibers, paints and adhesives, packaging materials, and industrial components."

Asian chemical plants rely on Gulf-derived naphtha for 60% of their feedstock needs. They have already begun feeling the impact of supply disruptions caused by the Iran conflict. Due to insufficient naphtha supply, 131 factories now face direct threats of shutdown.

Bibiane Barbaza, economic affairs director at France’s Plastics Industry Federation Polyvia, stated: "Some plastic companies are already experiencing raw material shortages. Many suppliers stopped accepting new orders as early as mid-March."

Fertilizer Shortage Hinders Spring Crop Planting

The blockade of the Strait of Hormuz directly affects fertilizer trade: 30% of global urea—the most widely used nitrogen fertilizer—and 23% of finished phosphate fertilizer exports, along with about 50% of sulfur exports, pass through the Gulf region.

Lazard Bank experts explained: "The near-total closure of the Persian Gulf came at the worst possible time, as it coincides with the start of spring planting season in the Northern Hemisphere. Farmers need to purchase and apply fertilizers during this period to support the growth of corn, soybeans, and wheat."

Even if the strait returns to normal operation quickly, U.S. farmers will still need to wait approximately 30 days before receiving urea shipped from the Persian Gulf—causing delays in fertilizer application.

Pharmaceutical Industry Hit by Double Blow

Additionally, petroleum derivatives are widely used in pharmaceutical manufacturing. Corinna Koeppen, Deputy Director at BearingPoint, noted: "Pharmaceuticals rely heavily on raw materials derived from petrochemicals—including key inputs like naphtha, ammonia, and paraffin, much of which originates in the Gulf region. Any sustained supply disruption here would directly impact global pharmaceutical production."

Due to the geographic dispersion of the global pharmaceutical industry—where active pharmaceutical ingredients are primarily produced in China and India—the already chaotic global logistics chain is further exacerbating the sector’s difficulties.

Source: rfi

Original article: toutiao.com/article/1861096306579499/

Disclaimer: This article reflects the personal views of the author