Strait of Hormuz Remains Open for Those Who Adhere to PGSA Protocols, But Global Economy Faces Inflationary Shock

28 June 2026 by Larry C. Johnson

After an exchange of missiles and drones on Saturday, the US backed down and declined to continue striking Iran. Qatar reportedly intervened to broker a new ceasefire. The US and Iran, in response to Qatar’s intervention, agreed to halt attacks against each other and plan to meet in Doha on Tuesday for technical talks aimed at resolving their dispute over the Strait of Hormuz, according to Axios.

The US-Iran meeting was originally planned to take place in Switzerland on Monday and focus on Iran’s nuclear program. Now the talks will take place in Doha on Tuesday. Iran’s position is firm… Traffic through the Strait must be carried out in accordance with the PGSA protocols. The US boxed itself in a corner with the language of the MoU:

5. Upon the signing of this MoU, the Islamic Republic of Iran will make arrangements using its best efforts for the safe passage of commercial vessels, with no charge for 60 days only, from the Persian Gulf to the Sea of Oman, and vice versa. The traffic of commercial vessels will immediately start, and considering the need for removing the technical and military obstacles, and de-mining by the Islamic Republic of Iran, will be instated within 30 days. The Islamic Republic of Iran will conduct dialogue with the Sultanate of Oman, to define the future administration and maritime services in the Strait of Hormuz, in discussions with other Persian Gulf Littoral States, in line with applicable international law and the sovereign rights of coastal states of the Strait of Hormuz.

The MoU give Iran the sole responsibility for making arrangements for the “safe passage of commercial vessels” through the Strait of Hormuz. If the US had insisted on including Oman and the other Gulf nations in the MoU then Iran would be obligated to consult with them. But the US accepted Iran’s language and Iran will insist there is no compromise on its sovereign right to manage traffic flow through the Strait.

While the world markets remain fixated on oil passing through the Strait, they are ignoring the profound impact of the halt in the shipment of Helium, Sulfur and Urea. The global economy is already experiencing the pain of the reduction in the supply of these commodities and the world will experience a global inflationary shock. Let’s look at each one.

Helium

The structural problem: Roughly one-third of the world’s helium production is impacted by the crisis, due to both the disruption of LNG production in Qatar and the very time-sensitive nature of helium transportation.

The mechanism was twofold. On March 2, state-owned QatarEnergy halted all LNG and associated production at Ras Laffan Industrial City following Iranian drone and missile strikes. On March 4, QatarEnergy declared force majeure on affected contracts. The company’s CEO stated that production would not restart until the conflict ended, and that even then, normalisation of deliveries would require “weeks to months.” Iran then struck Ras Laffan again on March 18-19.

Price movement: The shock hit fast. “The spot price for helium has moved up pretty dramatically. I would say 70 to 100 percent in a week,” said Phil Kornbluth, president of Kornbluth Helium Consulting and a 30-year veteran of the industry. Bank of America put the initial surge at 40%, while other estimates put prices at between 70% and 100% higher in some cases within a little more than a week.

The situation had an additional physical complication that other commodities don’t face. Roughly one-third of the world’s cryogenic helium ISO containers were stranded in or around Qatar. Repositioning this equipment after the conflict would require a minimum of three months, creating a supply gap that outlasts the conflict itself. Liquefied helium evaporates within roughly 45 days, meaning stranded inventory cannot be held for later delivery. Ships rerouting via the Cape of Good Hope face an additional 3,500 nautical miles, extending transit times by 10 to 14 days, during which liquid helium experiences boil-off losses of 15–20% of cargo volume.

By June 20, prices remained substantially elevated with no clear return path, because the damage to Ras Laffan is physical, not merely logistical. Even after Iran and the United States announced a ceasefire, the Strait of Hormuz remained largely closed due to overlapping blockades, meaning that even if production restarted, Qatari helium had no viable sea route to market. The structural problem persists through the MOU period.

Given Helium’s critical role in the production of computer chips, the price of computers and smart phones is soaring. Apple, for example, recently announced significant price hikes for the iPhone 17 Pro Max (+$200) and the 16-inch MacBook Pro (+$300).

Sulfur

Pre-war baseline — already stressed: The sulfur price to Indonesia rose from $101 per metric ton in July 2024 to $554 per metric ton by January 2026 as high-pressure acid leaching (HPAL) expansion drove demand — a 440% increase before the Iran conflict added further pressure. The market was already at multi-year highs before February 28.

The geographic exposure: Ships moving through the strait carry 24% of the world’s sulfur, a feedstock for sulfuric acid used to make metals like nickel and copper, as well as fertilizer and household cleaning products. The Middle East accounts for roughly 24% of global sulfur production and approximately 50% of global seaborne sulfur trade, all of which transits the Strait of Hormuz.

Price movement: Since the start of Operation Epic Fury, the price of sulfur has nearly doubled. Gulf states typically provide 45% of the seaborne sulfur trade through the Strait of Hormuz, and Iran’s blockade caused a 30% price spike by halting half of the global supply, creating bottlenecks in mineral extraction. Sulfur shortages were already leading to 20–30% output reductions for critical mineral miners.

The downstream cascade was severe. The World Bank noted that sulfur prices had doubled since January by April 2026, and that China’s move to tighten exports — in response to its own domestic shortfall as Persian Gulf imports dried up — added upward pressure on DAP (diammonium phosphate) prices. China banned sulfuric acid exports, impacting among other things copper production in Chile, which imported sulfuric acid as a consumable.

By June 20, with the MOU in place but Hormuz only partially normalising and QatarEnergy yet to fully resume operations, sulfur prices remained substantially above pre-crisis levels. As of May 2026, prices remained elevated, with the global fertilizer index projected to rise over 30% for the year amid persistent supply risks and rerouting challenges.

Urea

Pre-war baseline: Before the war, the cost of FOB granular urea in Egypt — a bellwether of nitrogen fertilizers — was $400 to $490 per metric ton. US retail prices hovered in the same general range through mid-February.

The geographic exposure: The Arabian Gulf is the central hub for global agriculture, accounting for at least 20% of all seaborne fertiliser exports. The dependency is even more acute for urea, the world’s most widely used nitrogen fertiliser, with 46% of global trade originating from the region.

Phase 1 — initial shock (late February to March): Oxford Economics’ Alpine Macro said urea and ammonia prices had surged by around 50% and 20%, respectively, since the war began. By March 3, a contract was signed for the supply of urea from Algeria at $618 per ton on FOB terms — the highest figure since 2022.

Phase 2 — peak (April 2026): Nitrogen (urea) prices climbed above $850 per metric ton in April, up 80% since February and the highest level since the 2022 commodity spike. US retail: Urea had a national average as high as $826 per ton in early April surges, up 34–35% month-over-month in some periods, and urea prices FOB Middle East reached around $795 per ton due to regional disruptions.

Phase 3 — partial retreat (May–June 2026): The urea market was the fastest to respond to the MOU and the partial Hormuz normalisation, partly because it is more fungible than helium and partly because the ceasefire allowed some rerouting via land corridors. FAO forecast international urea prices to ease from June as fertiliser shipments resume from the Persian Gulf and China returns to export markets after issuing new export quotas. After the de-escalation of tensions and statements regarding a ceasefire, the market experienced an oversupply, which led to a significant price drop.

However, in light of the events of the past three days, the expectations that ships carrying urea will be exiting the Persian Gulf are overly optimistic and the price is likely to rise until there is a clear sign that ships will be passing the Strait’s in accordance with the PGSA protocols.

Here’s the interview with Glenn Diesen from Friday:

https://www.youtube.com/watch?v=kcxI6XcdY4U&t=7s