Five days into Operation Epic Fury, the Strait of Hormuz is effectively closed. 

Iranian drones and missiles have struck targets across Kuwait, Qatar, Bahrain, Jordan, Saudi Arabia, and the UAE. QatarEnergy has halted LNG production at the world's largest export facility. Saudi Aramco shut the Ras Tanura refinery after drone hits. Over 150 ships sit stranded on either side of the strait, and commercial tanker traffic has dropped to near zero.

The world is focused on oil prices. And it is clearly the most directly impacted commodity. But crude is only the first domino. 

There’s so much more that flows through Hormuz: 30% of global fertiliser trade, 20% of seaborne LNG, and the naphtha feedstock that keeps European and Asian petrochemical plants running. 

The disruption has hit Europe at the worst possible moment: European gas storage at its lowest since the eve of the 2022 energy crisis, Northern Hemisphere farmers entering spring planting season, and Chinese phosphate exports already suspended until August.

The question every investor should be asking is not "where does oil go from here?" It is: who can supply the energy, gas, and chemical feedstocks that the Gulf temporarily cannot? 

The answer, as we have been arguing in recent editions of Impactfull Weekly, sits in the Americas.

In this edition of Impactfull Weekly, we dive into the complexities of supply chain disruptions in the Strait of Hormuz, how each one affects the other, and where the winners of this disruption lie. Hint, we’ve spoken about it recently.

Part 1: Assessing the damage

The Strait of Hormuz is 34 kilometres wide, but the usable shipping lanes are just 3 kilometres in each direction. Iran didn’t need to physically block the waterway with mines or warships. By attacking at least five tankers, broadcasting VHF closure warnings, and creating enough ambiguity about safe passage, Iran triggered a cascade of effects that will ripple throughout the world over the coming years.



Domino #1: Insurance blockade

By attacking all its southern neighbors, Iran triggered a blockade that spooked the insurance companies worldwide to stop providing war risk insurances to any of the ships wanting to cross the Strait of Hormuz. 

A commercial ship cannot sail without war risk insurance. If the insurer refuses cover, the ship stays in port, regardless of what the owner or the charterer wants. 

After the strikes, major war risk underwriters pulled out: Lloyd's of London syndicates, Norway's Gard and Skuld, Britain's NorthStandard, and the London P&I Club all cancelled cover for ships in the Persian Gulf. Protection and indemnity insurance (P&I) was formally removed from March 5. The economic risk became too high for any ship owner to bear.

To respond to this grinding halt of global trade, Trump announced that the US would provide government-backed insurance for tankers and, if necessary, US Navy escorts through the strait. The US Defense Finance Corporation (DFC) is being positioned as a backstop to get commercial traffic moving again. Whether that reopens the strait in practice remains to be seen: in the worst case scenario, the cost of insuring against such an event might go beyond the recent DFC budget increase of $145 billion for a total of $205 billion. 



Domino #2: Crude oil

(source: Google Finance)

As the price of crude oil reaches $80/barrel, and the price of chartering the Very Large Crude Carriers (VLCCs) reaches record highs, we begin to realise the volumes at stake.

(source: CNBC)

Roughly 20 million barrels per day transit through Hormuz, about 20% of global seaborne crude. 

Saudi Arabia's East-West Pipeline (7 million barrels per day capacity) and the UAE's Fujairah pipeline offer partial bypass routes, but terminal infrastructure at the Red Sea end (that has never had to output more than 2 million barrels per day), limits what can actually be loaded and shipped. These pipelines can sustain a fraction of displaced volume but cannot offset the closure of the entire strait.

Domino #3: LNG, the biggest shock


On March 2, QatarEnergy halted production at the Ras Laffan facility and the Mesaieed facility after Iranian drone strikes hit both complexes. 

Ras Laffan alone accounts for roughly 20% of the entire global LNG export capacity. Plus, Saudi Aramco also shut the 550,000 barrel per day Ras Tanura refinery after Iranian drone strikes caused fires in the plant.

One thing to know is that these multibillion dollar facilities are rarely supposed to shut down, and the cost of restarting them once they’re shut is easily in the hundreds of millions and can take weeks under optimal conditions.

Why does this matter beyond the Gulf? LNG is the fuel that heats European homes, generates Asian electricity, and, critically, serves as the primary feedstock for ammonia and urea production that are crucial for agricultural fertilisers.

Domino #4: Naphtha, fertilisers, & petrochemicals

The damage to the oil pipelines extends way beyond just crude oil and LNG. 

Some of the most important ingredients for global food & consumer goods production like the naphtha that is used to make plastics, sulphur, urea and ammonia that all go into fertilisers are produced and transported by the very countries that are now under attack like Saudi Arabia, UAE, Qatar, Kuwait, etc.

Naphtha: Naphtha is a petroleum product used both as a gasoline blending component and as the primary feedstock for European and Asian petrochemical crackers (the industrial plants that produce ethylene, propylene, and other building blocks for plastics, packaging, and synthetic materials). 

With roughly 14% of global refined product trade transiting Hormuz, European and Asian petrochemical producers face a simultaneous feedstock squeeze and cost spike.

Fertiliser raw materials: These raw materials are the most underreported casualty of the disruption. The Strait of Hormuz carries 44% of globally traded sulphur, 31% of urea, 18% of ammonia, and 15% of phosphates.

Sulphur is the feedstock for sulphuric acid, which is essential for producing phosphate fertilisers. Half of seaborne sulphur exports originate from the Gulf. Sulphur prices had already tripled in 2025. 

Urea, the world's most widely used nitrogen fertiliser, depends heavily on Gulf supply: 40-50% of the 55-60 million tonnes traded annually comes from the Middle East.

Ammonia, which is the backbone for both fertiliser production and industrial chemistry, sees roughly 20% of global trade originate from the Gulf.

The impact cascades into specific regions and industries. 

  • Indian and Moroccan fertiliser producers, the largest ammonia importers, face immediate feedstock shortages. 
  • African copper miners in the DRC and Zambia, who require 3.5-4.5 tonnes of sulphuric acid per tonne of copper produced via heap leaching, face surging acid costs. 

Critically, China had already suspended phosphate exports until August 2026, meaning the Gulf disruption landed on a fertiliser market that was already structurally tight.

Part 2: Second-order effects

Now that we know the scale of the disruption across different dominoes being toppled, from insurance blockades all the way to a lack of fertiliser raw materials where the Middle East has been a major supplier to the world, it’s time to see what butterfly effects it has across many more regions, industries, and companies.

Farmers’ spring planting threatened

As spring begins to take hold over most of Europe, it coincides with the sowing season of crops to be harvested in 6 months to a year. Planting cycles cannot be delayed, Northern Hemisphere farmers need their fertilisers now. 

The fertiliser trade operates on a just-in-time basis, where raw materials are transformed into the required fertilisers and immediately shipped to the farmers to maintain their effectiveness. With Gulf sulphur, urea, and phosphate flows being blocked, and no strategic fertiliser reserve anywhere in the world given its short lifespan, application costs for these fertilisers are spiking.

A ship being loaded in the Middle East today wouldn’t reach the US until mid-April, and March and April are the two largest months for US urea imports. If shipments are delayed anymore, the supply crunch will arrive when demand is at its peak.



Double trouble

If it were only the Strait of Hormuz being nearly blocked, it would be somewhat manageable, as Gulf exports could theoretically reroute through the Red Sea terminals. 

But the Red Sea has its own risk: Yemen's Houthi movement has announced that they will resume attacks on commercial vessels as the entire region is focused on the Iran conflict.

The Houthis disrupted global shipping for much of 2024-2025, and an additional 5% of global fertiliser trade (including Russian, Belarusian, and European fertilisers heading to Asia, plus Jordanian and Egyptian phosphates) transits Bab el-Mandeb, the Red Sea chokepoint. 



If both straits are compromised, the only route left is around the Cape of Good Hope, adding weeks of transit and millions to the final bill.

Are we doing 2022 again?

(source: ICE Index)

EU gas storage entered 2026 at 61% of capacity (vs. 72% in 2025). 

After a cold winter, LNG storage went down to roughly 30% by early March: the lowest since Russia invaded Ukraine in 2022.

The EU had lowered its binding storage target from 90% to 75% in September 2025, and three of its five largest gas consumers (Germany, Spain, Netherlands) failed even that reduced storage threshold.

With Qatari LNG offline and global facilities already at full capacity, Europe must now compete with Asian buyers (China, India, Japan, South Korea)  for the remaining batches of Atlantic Basin cargoes from the US & Canada, and suddenly it feels like we were transported back 4 years in time.

Biofuels squeeze food supply

Higher crude prices make alternative biofuels more attractive. 

Biodiesel competes directly with petroleum diesel, so whenever crude prices spike, it drives demand for vegetable oil as a fuel feedstock, diverting it from the food chain. 

By extension, soybean oil has hit a two-year high, palm oil rose 1.6%, and sugar futures (an ethanol feedstock) rallied. 


Indonesia's B40 biodiesel mandate was already squeezing the supply of palm oil. 

The net effect of this rush towards securing biofuels means that: food prices face a triple pressure from input costs (fertilisers taking longer), transport costs (freight and fuel costing more), and feedstock diversion (biofuels eating into the existing stock of vegetable oils) simultaneously.

Is inflation back on the table? Maybe.

Part 3: Winners, in the short and long term

If you’re reading this intricate dance between geopolitics and commodity markets, seeing the cause-and-effect relationship of raw materials to their effect on end-users & realising just how far we are today from the world of free flowing commerce, you will start to get an idea of where to allocate your resources. 

For this specific Strait of Hormuz scenario, we see winners both in the short term, as well as in the long term who have completely different characteristics to leverage current short-lived advantages, vs. longer term structural tailwinds that support our picks. 

Short-term winners

When important commodities like crude, LNG, Naphtha, urea, ammonia, etc. are facing a sudden supply disruption, filling this gap becomes of utmost importance. However, current leaders in producing LNG, fertilisers, etc. that are not affected by the Hormuz situation, have already been pumping out their products at maximum capacity. 

US LNG exporters are the first immediate winners of this situation, the broader US LNG complex sits on cheap Permian Basin gas while European spot prices spike 76%. 

The spread between US domestic gas and European TTF prices is a windfall for anyone who can liquefy and ship across the Atlantic.

Norwegian gas becomes even more critical. Equinor hit a 52-week high on Monday March 2. Norway is Europe's last reliable pipeline gas supplier, and with Qatari LNG offline and Russian pipeline gas already largely eliminated, Norwegian volumes attract a structural premium, despite them already producing at capacity.

US petrochemical producers benefit from cheap LNG feedstock while European and Asian competitors have to face surging naphtha and gas costs, leave alone securing enough LNG supply to keep the factories running. This cost advantage widens every day the strait stays shut.

North American fertiliser producers have the domestic feedstock from their massive LNG pipelines, geographic insulation from Hormuz, and pricing power in a market where almost half of global sulphur flows are disrupted. 


This makes for an interesting cocktail of strategic advantages that the US has maybe unwillingly collected, which must have been noticed by Canadian PM Carney and German Chancellor Merz for them to have significantly modified their earlier positions, to now secure energy exports for Canada, and energy imports for Germany. 

Long-term winners

This is where our investment case is the most compelling, and if you read one of our previous essays on Latin America’s energy & export-driven economic revival, it neatly fits into this new paradigm.

The EIA forecasts 0.8 million barrels per day of global crude production growth in 2026. Brazil, Guyana, and Argentina account for half of that: 0.4 million barrels per day. These three countries drove 28% of non-OPEC production growth in 2025. 



They are the engine of non-Gulf supply expansion, and every one of them sits in the Atlantic Basin, outside any conflict chokepoint.

Brazil: Production in Brazil topped 4 million barrels per day in October 2025. Petrobras holds 12.1 billion barrels of proven reserves in pre-salt deepwater. And the breakeven price for Brazilian crude is as low as $28 per barrel, providing significant breathing room for free cash flow if the crude prices stay at $80 and beyond. Unlike Venezuela’s crude, this is light, sweet, low-carbon crude that Asian buyers are already redirecting procurement towards.

Guyana: Guyana went from having zero oil production to the world’s fastest growing country by GDP in 2025. Their output averaged 900,000+ barrels per day by the end of 2025. ExxonMobil's flagship discovery, the Stabroek Block holds 11 billion barrels of discovered resources, with three more projects through 2030.

Argentina: Argentina has had twin surpluses (fiscal surplus & trade surplus) for the first time since 2010. The Vaca Muerta field’s shale production reached 740,000 barrels per day in 2025 and is forecasted to produce 810,000 in 2026. The breakeven price for Argentinian shale is at $40-45 per barrel, still extremely lucrative. 

Their LNG export terminals are under construction with YPF and Eni, set to swing Argentina's trade balance by $3-5 billion annually from 2027 onwards. As we detailed in our essay on Argentina, Impactfull Weekly #13, the infrastructure buildout is real and accelerating.

(source: OilPrice)

Venezuela: Venezuela is the longest-dated option with a trickier path to ramping production. 303 billion barrels of proven reserves, Venezuelan production is recovering at roughly 90,000 barrels per day above the recent trough following Maduro’s capture that we covered in Impactfull Weekly #21. Rehabilitation of the economy & infrastructure will take years and tens of billions, but directionally, every barrel recovered here is one less that’s sourced from the volatile Gulf.

All in all, our underlying POV is this: even if the Hormuz crisis resolves in weeks, the diversification thesis has been permanently validated. 

Every Asian and European buyer that watched their supply vanish overnight will accelerate procurement from Atlantic Basin producers. The crisis only accelerates the speed at which Asian countries & European countries will diversify away from the Gulf and towards LatAm.

Companies to watch


(our list of 15 companies bound to benefit from the structural diversification towards north & south american energy suppliers)

Link to the matrix here 

Smaller companies to invest in

To dig further into smaller companies bound to benefit from this Hormuz disruption, create your own StockScreener like we did:

Bonus: ETFScreener

To find out more about ETFs available to index this Hormuz disruption, make your own ETF Screener like we did:

Our take

From what we see, there are two ways from where we stand today.

Either Iran’s military mounts a coup (or the regime de-escalates when Israel & US would have eliminated leadership till finding someone friendly), in which case oil prices will come back down to pre-crisis normalcy, equities will rally as the supply chain disruption is solved and Trump takes a victory lap.

Otherwise, the military stays loyal to the Islamic Revolutionary regime, the blockade continues for weeks if not months, and we get a repeat of 2022 and 1970 at the same time: oil prices going past $100/barrel, European energy crisis, fertiliser shortages leading to food shortages and massive inflation.

In the first scenario, LatAm and NorthAm energy producers do quite well because the diversification case is validated. And in the second, they win as well because they are the only producers delivering incremental supply outside the OPEC+ conflict zone.

No matter how you cut it, the same names win. Brazil, Guyana, Argentina, the United States, and Canada are where non-Gulf production growth is happening. These are the structural beneficiaries of a world that has just been reminded, painfully, of the fragility of concentrated supply chains.

As we argued in our previous essay on Latin America: you do not own enough.

Stay invested, cautiously.