Global supply chains face renewed strain as Strait of Hormuz tensions resurface

The Strait of Hormuz is vital to global shipping and supply chains as it is central to global energy trade, carrying about one-fifth of the world’s oil and roughly one-third of global fertilizer—making it a critical artery for agricultural production and food systems worldwide.

The 60-day U.S.–Iran memorandum of understanding (MOU) revived some shipping activity, including the movement of previously stranded vessels. However, with the MOU for the moment effectively cancelled, ships and transits are again reduced. Without progress toward a lasting agreement, supply chain constraints and elevated freight and energy costs are likely to persist.

This blog reviews shipping trends and key indicators—vessel traffic, freight rates and crude oil inventories—and their implications for Canadian agriculture. The renewed conflict in the Strait of Hormuz has heightened uncertainty across global energy and shipping markets, increasing the risk of supply chain disruptions and higher transportation costs. With crude oil inventories already tight and limited ability to rebuild supplies, freight and energy markets are likely to remain elevated. Unless tensions ease significantly, disruptions to shipping flows and energy markets could extend well into 2027, creating ongoing challenges for agriculture and food supply chains.

Global shipping and supply chains: Persistent disruptions and heightened vulnerability

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