Strait of Hormuz disruptions threaten global food security and Iran's economy

The Strait of Hormuz is facing a critical disruption in the flow of goods, leading to significant risks for global food security and the Iranian economy. According to International Chamber of Commerce (ICC) Secretary General John Denton, the crisis in the waterway has reduced available fertilizer capacity by approximately 40%, with 2.7 million tons removed from the market. Denton warned that grain prices could rise by as much as 80%, disproportionately affecting developing and emerging economies like the Philippines.

Simultaneously, Iran is facing a severe economic crisis driven by US sanctions and declining oil exports. Crude oil production has dropped to roughly 2 million barrels per day, half of pre-conflict levels. Reports indicate that Iran sent no oil from its ports in September, marking the first time since 2013. With domestic storage reaching record levels near 70 million barrels and available exportable oil dwindling, the Iranian economy is struggling with hyperinflation, which recently reached 90%.

While international attention often focuses on the military tensions between the US and Iran, the ICC emphasizes that the potential for global food shortages due to fertilizer and energy supply disruptions is a more lethal consequence of the ongoing instability.