"The uneasy truce in the Gulf has given business leaders a chance to take stock. If trade starts flowing once again through the Strait of Hormuz, inflation risk will recede. The ebullience of the markets, hardly tempered as rockets flew and bombs exploded, will continue, probably with even more vigor. Those exposed to the conflict-oil producers, high-energy-use firms, and anyone who relies on global supply chains-will see a degree of normality return."
""The Strait of Hormuz is the most important shipping channel for the export of urea fertilizer in the world," Yara chief executive, Svein Tore Holsether, tells me. "About one-third of traded or exported urea fertilizer goes through the Strait and there is significant production in that region. Iran is a big producer.""
""Every day that passes, fertilizer is not being produced, and there's limited inventory capabilities also-so ships are full. That means that products are not finding their way to the market.""
"For Yara-#300 on the Fortune 500 Europe list-downside risks may appear insurmountable. The opposite is true. Last month, it announced quarterly profits of $896m, beating forecasts. Shares rose 4% as the price of urea (a central component of the fertilizer Yara sells) hit levels not seen since Russia's full-scale invasion of Ukraine in 2022."
An earlier warning about not wasting a crisis is applied to the Iran conflict. A fragile truce in the Gulf creates an opportunity for business leaders to reassess conditions. If trade resumes through the Strait of Hormuz, inflation pressure could ease. Market optimism may persist despite ongoing attacks. Firms exposed to conflict-linked oil and energy costs, as well as those dependent on global supply chains, may see more normal operations. Yara International, a major fertilizer producer and gas consumer, relies on the Strait for urea fertilizer exports. Limited inventories and full shipping capacity can prevent products from reaching markets when production is disrupted. Yara reported strong quarterly profits and rising shares as urea prices increased.
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