Escalating tensions around the Strait of Hormuz are raising risks for grain and food importers across the Gulf by driving up energy, freight and insurance costs and tightening pressure on agricultural supply chains, according to Dr. Sadar Abdul Rasheed, Risk Governance & Industrial Hedging Specialist.
Dr. Sadar Abdul Rasheed
Risk Governance &
Industrial Hedging Specialist
In comments shared with Miller Magazine, Dr. Rasheed said the first transmission channels into agri-commodity markets were energy, freight and marine insurance, which reprice the food chain more quickly than foreign exchange or credit conditions. “Hormuz-related disruption moves first through energy, freight and insurance because these immediately affect fertilizers, processing, logistics, ocean freight and the landed cost of food,” he said, adding that FX and liquidity pressures tend to act more gradually.
For Gulf Cooperation Council (GCC) countries, which import most of their food needs, the crisis is shifting the meaning of food security away from simple global supply availability toward assured delivery at a predictable landed cost, Dr. Rasheed said. That means governments and buyers must think not only about staple inventories, but also about diversified shipping corridors, flexible contracting and adequate buffers in key inputs such as fertilizers, fuel and packaging materials.
COMPOUNDING COSTS IN THE HORMUZ CORRIDOR
Dr. Rasheed said the current “war premium” visible in wheat and edible oils should be understood as part of a broader logistics and cost shock. If Hormuz shipping lanes remain insecure, buyers in the region face higher ocean freight, rising war-risk insurance, bunker fuel increases, port congestion and potential demurrage costs, all of which could lift the final landed price of grain and edible oils.
He warned that the impact could extend beyond food cargoes themselves. Disruptions to ammonia, urea, LPG and other energy-linked flows could tighten fertilizer availability and feed inflation deeper into agricultural supply chains.
The risk is more significant because Hormuz tensions are developing while Red Sea routes remain under pressure, effectively creating what Dr. Rasheed described as a “two-route risk” for regional buyers. “Until both chokepoints stabilize, higher supply-chain costs are likely to persist,” he said.
DISCIPLINE OVER PANIC IN TIMES OF UNCERTAINTY
For governments seeking to shield consumers from sharp volatility, Dr. Rasheed pointed to tools already used in the region, including buffer stocks, structured tendering cycles and controlled retail pricing mechanisms. For private-sector boards, his advice was to preserve hedging discipline and avoid decisions driven by headlines.
He said companies should stay within pre-approved policy ranges, spread execution over time and avoid both panic-buying and complete inaction. In the current environment, he added, physical deliverability risks such as freight access, insurance certainty and route viability may matter more than trying to capture a marginal price advantage.
OPERATIONAL INDICATORS AND RISK BENCHMARKS
Dr. Rasheed also urged buyers to review war-risk clauses, force majeure language and letters of credit to ensure procurement and financing terms remain aligned with changing insurer notices and shipping risk classifications.
Among the main indicators to watch over the next one to two weeks, he cited daily tanker transit volumes through Hormuz, changes in war-risk insurance zones and premiums, bunker fuel spreads, freight surcharges, port congestion, vessel visibility data and the pace of fertilizer and ammonia shipments from the Gulf.
A normalization in these indicators would suggest a short-term shock, while continued disruption would point to a more prolonged structural rise in landed food costs for import-dependent Gulf markets, he said.