From instant noodles to trash bags to chips, global price chaos, and Middle Eastern conflicts pushing the supply chain to the brink of collapse.

For American consumers, snacks, processed foods, beverages, dairy products, meats, and other items in supermarkets may face higher factory-gate and transportation costs going forward. Photos/ Jin Yan

The nearly halted Strait of Hormuz has thrown the global LNG market into turmoil, and the sudden arrival of a tropical cyclone in Australia has sharply worsened this energy crisis.

Byline: Jin Yan, a special correspondent for 《Caijing》, reporting from Washington

Editor | Su Qi

As the conflict in the Middle East escalates violently in certain areas, the global economy is facing the most severe commodity flow shock in recent years. The duration of the fighting appears to have gone beyond what U.S. President Trump initially expected, and some media outlets have reported that Trump is looking for diplomatic options everywhere. On March 27, local time, U.S. presidential envoy Witkoff said that this week he expects to hold talks with Iran. Witkoff also said he expects to soon receive Iran’s response to a 15-point ceasefire proposal submitted by the U.S. But the Hormuz Strait crisis is pushing the market into a fundamental contradiction between words and reality. U.S. Secretary of State Rubio, speaking on Friday, March 27, while attending a meeting of G7 foreign ministers in France, said it is expected that any military action against Iran will end “at the appropriate time”—“we’re talking about weeks, not months.” The U.S. can still achieve the goals of military action against Iran without deploying ground troops, including destroying Iran’s missile and drone capabilities, etc. This is the first time a senior U.S. official has hinted that the duration of the fighting in Iran will exceed the “four to six weeks” timeframe that Trump has repeatedly mentioned since the start of the war.

Traders warn that the longer the conflict lasts, the more the energy shock will intensify by one notch each day, putting the global economy as well as the stock and bond markets in even greater danger. A senior Goldman Sachs trader bluntly said that words cannot replace physical molecules, and that once verbal deterrence fails, the real stress test is only just beginning. By the end of March, traders’ shifting rhetoric around the Iran issue has clearly shown “headline fatigue.” Meanwhile, rising oil prices have reignited inflation concerns, leading Wall Street to experience one of the most volatile weekly trading sessions since the outbreak of the Iran conflict.

Rich Privorotsky, head of Goldman Sachs’ One-Delta business, pointed out in a recent client memo that although the U.S. has again delayed strikes on Iran’s energy infrastructure, the oil market’s reaction has remained muted. The market’s focus has been highly narrowed to one question—when will the Strait of Hormuz reopen? He warned, “You can’t replace molecules with talk.”

U.S. stocks fell on Friday, March 27. The Dow plunged by more than 790 points, falling back into a pullback range. The S&P 500 Index is on track for its worst monthly performance since 2022. All three major indexes recorded a fifth consecutive week of declines. U.S. WTI crude hit the highest level since 2022, as the situation in the Strait of Hormuz has heightened investors’ concerns about energy supply, and Trump’s latest remarks have failed to encourage traders to buy the dip.

The Iran conflict has sparked concerns about a global fertilizer shortage. As fertilizer and natural gas prices rise, it will ultimately push up costs for agricultural products and processed foods. Businesses and consumers worldwide are feeling the crisis. Everyday consumer goods—including beer, potato chips, instant noodles, toys, cosmetics, and even plastic bags—have been severely disrupted, with prices rising. For American consumers, this means snacks, processed foods, beverages, dairy products, meats, and other items in supermarkets may face higher factory-gate and transportation costs going forward. Several economists told Caijing that sustained price increases could trigger a stagflation shock.

Some industries are under pressure—at times even greater than during the COVID-19 period—pushing them to the brink of life and death.

There are factories producing plastic film: on the one hand, to cover crops for farmers; on the other hand, to be used for packaging products such as televisions. But now, some upstream raw-material prices have risen by 50%; some suppliers have even simply cut off supply and stopped shipments. A factory in South Korea said it has managed to get through the 1970s oil crisis and also survived the COVID-19 outbreak in 2020, but this time the shock from the war is unprecedented. The company’s output has already fallen significantly by 20% to 30%.

Global beer manufacturers have issued warnings about price hikes and supply disruptions. Photos/ Jin Yan

Multiple crises

The Iran conflict has driven up oil and gas prices, and EU member states are considering whether to levy taxes on energy companies’ profits. After a meeting held in Brussels on Friday, an official in charge of the EU’s economic affairs said that some finance ministers in the euro area suggested addressing the price increases through a “windfall profits tax.” According to media reports citing people with knowledge of the matter, Germany and Austria support this measure. The European Commission said it will assess its feasibility during the meeting. The Austrian and German governments did not respond immediately to requests for comment.

At present, the Hormuz Strait is effectively closed, causing oil and gas prices to surge significantly.

In terms of market impact, Privorotsky believes that the inflation shock caused by the Hormuz disruption goes far beyond crude oil itself and is spreading into areas such as diesel, petrochemical products, plastics, and even helium. The related price pressures will gradually filter through to a broader level of the economy over the coming months, forming a potential second wave of inflation. The latest monitoring by the United Nations Food and Agriculture Organization (FAO) shows that, as the “lifeline” for global energy and fertilizer trade, shipping disruptions in the Hormuz Strait have had cascading effects. This is not only an energy crisis triggered by geopolitics—it has evolved into a systemic disaster that threatens global food security and the stability of agricultural systems.

As one of the world’s sources of one-third of its helium supply, the Ras Laffan facility in Qatar suffered “large-scale” damage. As a result, spot helium prices have doubled within 14 days, and contract surcharges have exceeded 30%. Mark Almond, director of the Oxford University “Crisis Research Institute,” said that once the helium supply chain is interrupted by the war, the industrial structure of countries and regions such as South Korea will appear unusually fragile in the face of the war shock. In the etching processes used to manufacture chips, helium must be continuously blown onto the backside of the wafer to rapidly and evenly carry away heat, maintaining a stable temperature on the wafer surface. Helium is also an indispensable key input for semiconductor manufacturing—including the production of smartphones and chips—and is used to maintain a clean environment and cooling systems. Once supply is disrupted, the global electronics industry will fall into chaos.

The Strait of Hormuz carries about 35% of the world’s seaborne crude oil trade, 20% of LNG (liquefied natural gas), and up to 30% of international fertilizer trade. In just a few days after the outbreak of the conflict, the amount of tanker transport through the strait fell by more than 90%. This near “shutdown” state directly cuts off the sources of power for global industry and agriculture. The nearly halted Strait of Hormuz has thrown the global LNG market into turmoil, and the sudden arrival of a tropical cyclone in Australia has sharply worsened this energy crisis.

On March 27, media reports said that the tropical cyclone Narelle is approaching the coastline of Western Australia from the east, causing three of Australia’s major LNG export facilities—Gorgon, Wheatstone, and North West Shelf—to suspend production in succession. Together, these three facilities account for about 8.4% of global LNG trade volume. Meanwhile, in the Middle East conflict, the export capacity of Qatar’s global largest liquefaction facility has been damaged by about 17%, and repair timelines could take years. With the double shock compounding, buyers in Asia and Europe are racing to find alternative suppliers.

A deeper crisis is hidden in raw-material supply. The Gulf region supplies nearly 50% of the world’s sulfur—an essential key raw material for producing phosphate fertilizer. In addition, the region accounts for 20% to 30% of global ammonia exports. This means that the blockade of shipping lanes not only blocks the transport of finished fertilizers, but also cripples the global fertilizer production chain at its source.

Uncontrolled logistics costs are the first stop of the shockwave. Because the sea area has been designated a high-risk zone, shipping insurance premiums have skyrocketed from the original 0.25% to 10%, and insurers require re-evaluation every seven days. Coupled with the surge in fuel costs and detour expenses, transportation costs across the entire supply chain have risen exponentially. This cost pressure is rapidly transmitted through the logic chain of “energy—fertilizer—food”: nitrogen fertilizer production highly depends on natural gas; fluctuations in energy prices directly raise the fertilizer floor price; the FAO has warned that if the crisis continues, the average global fertilizer price increase in the first half of 2026 will reach 15% to 20%. On agricultural production costs, farmers are squeezed by simultaneous increases in fuel and fertilizer prices, which will ultimately be reflected in terminal food prices such as wheat, corn, and edible oils.

The FAO’s chief economist, Maximo Torero, said that the duration of the conflict will determine the depth of spillover effects. If the situation can ease within a month, the market still has room to absorb the impact; but if supplies are interrupted for the long term, it will directly lead to a fertilizer shortage in the next planting season and, in turn, cause production to fall. Another potential red line is oil prices. Once international crude oil breaks above $100 per barrel, demand for biofuels will be reactivated. At that time, the energy industry will enter a race to capture agricultural products with food-consuming industries, further pushing up food prices and leaving more vulnerable countries that depend on food imports.

Everyday goods see price hikes

Plastic and packaging-related products have become more expensive due to the war’s impact. Many items such as shampoo, cleaning agents, trash bags, plastic wrap, disposable products, and cosmetic packaging are all tied to petrochemical raw materials. As oil and gas prices rise, costs for plastics, resins, packaging films, and adhesives increase; when ocean shipping and insurance are also more expensive, terminal retail prices are more likely to be raised. Higher energy costs are directly hitting energy-intensive industries such as chemicals.

Against the backdrop of continued tension in the Middle East, some people in South Korea worry that key raw material supplies needed to produce plastic products may fall short. In multiple places, there have been “rush buying” waves for trash bags, and some supermarkets have imposed purchase limits. Korean media reported on the 26th that the South Korean government plans to list trash bags as “core controlled items” to monitor supply and demand, while emphasizing that inventories are sufficient at present and there is no need to stockpile.

South Korea charges a trash bag fee based on measurement, meaning residents need to purchase dedicated trash bags. Influenced by the situation in the Middle East, concerns within South Korea about potential interruptions to crude oil supply have intensified, leading residents to buy in large quantities out of fear that supplies of trash bags will be insufficient. Shortages have appeared in multiple areas, and some supermarkets in places such as Daegu have implemented purchase limits.

A South Korean plastic plant with a 57-year history is facing a severe test. Plant manager Choi Geon-soo (pronunciation) said with concern, “Some product raw materials are in short supply, so we have to gradually shut down some machines. The next one to two weeks may be an extremely critical period.”

In response to the situation above, the South Korean government said on the 25th that currently, domestic inventories of trash bags are sufficient and it is calling on people not to panic-buy and stockpile. The investigation results released by the Ministry of Environment, Energy, and Climate change showed that, currently, the average trash bag inventories of 228 local governments in South Korea can maintain for more than three months, with 123 local governments able to supply for more than half a year. In addition, the recycled raw materials held by recycling companies can produce about 1.83 billion trash bags, higher than the 1.78 billion trash bags sold nationwide last year. This means that even if raw-material supply is completely cut off, production can still be maintained for more than a year.

Spillover shock from the Iran conflict is rapidly transmitting to the Indian market. Multiple global beer manufacturers operating in India have issued warnings about price increases and supply disruptions: on the one hand, natural gas shortages are driving up the production cost of glass bottles; on the other hand, transportation delays also affect imports of the aluminum needed to produce cans.

As the world’s fourth-largest natural gas importer, India is extremely sensitive to fuel supply and is highly dependent on Middle East shipping routes, with about 40% of its natural gas supply coming from Qatar. Iran’s strike actions have partially disrupted Qatar’s export capacity, resulting in tighter natural gas supply for India’s manufacturing industry. The Indian Brewers Association, representing international beer giants such as Heineken, AB InBev, and Carlsberg, told the media that prices for glass bottles have already risen by about 20%, cardboard box prices have doubled, and the costs of other packaging materials such as labels and tape are also continuing to climb. Natural gas is the key energy source for keeping furnaces and production lines running. Under conditions of supply shortages, several glass-bottle manufacturers in India have been forced to partially shut down operations, and in some cases to stop completely. Meanwhile, aluminum can suppliers have also issued warnings that as India is about to enter its summer peak sales season, aluminum can supply may become even tighter.

Giri, the general secretary of the Indian Brewers Association, said, “We are seeking to raise product prices by 12% to 15%, and we have already advised member companies to engage in discussions with the state governments where they operate.” He added that rising production costs have already made it difficult for some companies to continue operating.

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