What percentage of global chemical trade transits the Strait of Hormuz?

While the article does not specify an exact percentage for chemicals alone, the Strait of Hormuz handles approximately 20-30% of global maritime petroleum trade. Given that many chemical feedstocks originate from or are refined in the Persian Gulf region, chemical supply chains are heavily exposed to disruption. Fitch's warning specifically highlights that prolonged closure would impact 'global chemical output,' indicating substantial exposure across the sector.

How long would a 'prolonged' closure need to be to cause material supply chain disruption?

Fitch does not specify an exact duration threshold in the article, but the use of 'prolonged' suggests beyond immediate short-term events. Given chemical manufacturing lead times (often 4-12 weeks) and just-in-time inventory practices, even a 2-4 week closure would trigger stockouts for dependent industries. Extended closures lasting months would force rerouting through significantly longer passages (adding 2-3 weeks of transit time) and create structural supply shortages.

Which industries beyond chemicals would be most affected by a Hormuz closure?

Fitch's warning directly addresses chemical output impacts, but downstream industries would face cascading disruption. Pharmaceuticals (dependent on chemical APIs and excipients), automotive manufacturing (specialty chemicals for coatings and components), electronics (chemical inputs for semiconductor production), and energy (petrochemical feedstocks) would all experience material supply constraints. The global nature of modern supply chains means disruption would propagate across multiple sectors within weeks.

What alternative shipping routes exist if the Strait of Hormuz closes?

Alternative routes include circumnavigating Africa via the Cape of Good Hope (adding approximately 2-3 weeks to transit times and significant additional costs) or routing through pipelines to Mediterranean ports for transshipment. However, pipeline capacity is limited and alternative ports lack the infrastructure to handle diverted volumes quickly. These workarounds are temporary measures with substantial cost and time penalties.

How should chemical manufacturers prepare for potential Hormuz disruption?

Supply chain teams should conduct vulnerability mapping to identify Hormuz-dependent feedstocks and products, establish strategic inventory buffers for critical inputs, diversify supplier base away from Gulf-only sources, negotiate long-term contracts with alternative suppliers, and develop contingency routing plans. Companies should also evaluate nearshoring opportunities and consider dual-sourcing strategies for materials currently concentrated in Middle Eastern producers.

Risk & Disruption

Critical

Hormuz Closure Could Devastate Global Chemical Output

May 26, 2026

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Fitch Ratings has issued a critical warning that an extended closure of the Strait of Hormuz would severely disrupt global chemical output and downstream manufacturing. The Strait, through which approximately 20-30% of world maritime petroleum trade flows, represents a critical chokepoint for chemical feedstocks and finished products. A sustained blockade would create immediate supply shortages, force alternative routing through significantly longer sea passages, and trigger cascading delays across pharmaceutical, manufacturing, and industrial sectors worldwide.

This assessment carries particular weight given Fitch's position as a major credit ratings agency and the precedent of regional tensions in the Persian Gulf. Chemical companies relying on just-in-time inventory models and long lead times would face severe operational strain. Firms sourcing raw materials, intermediate chemicals, or finished products from Middle Eastern producers or dependent on Gulf shipping lanes face the most acute vulnerability.

For supply chain professionals, this warning underscores the need for strategic inventory buffers, supplier diversification away from single-source Middle Eastern dependency, and contingency routing plans. Organizations should conduct vulnerability assessments focused on chemical feedstock exposure and evaluate nearshoring or regionalization strategies to reduce Hormuz passage dependency.

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What This Means for Your Supply Chain

Simulation Suggestion

immediate

What if Hormuz closure extends transit times by 3 weeks and increases shipping costs by 40%?

Simulate a scenario where Strait of Hormuz closure forces rerouting around Africa via Cape of Good Hope, extending ocean transit time from 3 weeks to 6 weeks for chemical shipments from Middle East/South Asia to Europe and North America, while premium alternative routing increases per-container costs by 40%. Model impact on lead times, inventory carrying costs, and working capital for companies with high chemical feedstock dependency.

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Simulation Suggestion

this week

What if chemical supplier availability drops 30% due to stockpiling and allocation?

Model a demand-supply shock where chemical suppliers begin rationing or allocating products during Hormuz closure uncertainty, reducing available supply by 30% across key feedstocks (polymers, specialty chemicals, petrochemicals). Simulate cascading effects on dependent manufacturers, lead time extensions, and price inflation as customers compete for limited inventory.

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Simulation Suggestion

strategic

What if you shift 25% of chemical sourcing to nearshore/regional suppliers?

Simulate a strategic sourcing shift where companies nearshore or regionalize 25% of chemical procurement away from Middle East/Gulf suppliers to European, North American, or Asian regional producers. Model changes to lead times, unit costs (likely higher initially), inventory requirements, and resilience metrics. Evaluate payback period through reduced Hormuz risk exposure.

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