Quick Take: The Shock That Is Not One

Oil, sulphur, fertiliser, and the downstream cascade most people are not tracking

AI-generated image: One pipeline, five channels. The divergence is the story.

Price data timestamped to market close, 18 March 2026, and early session 19 March 2026. Figures may have moved by publication.

Most people are tracking Brent crude and calling this an oil shock. That framing is too narrow. What is unfolding across global commodity markets since the US-Israeli strikes on Iran began on 28 February and Iran closed the Strait of Hormuz is not one shock. It is a stack of linked disruptions moving through different channels, at different speeds, hitting different countries at very different severity.

Start with crude. Even at the headline level, the price signal is fractured. Cash Dubai hit a record above USD 150 per barrel on 16 March, with Oman settling at USD 152.58. Brent traded above USD 115 in early session on 19 March. WTI briefly touched USD 100. Urals crude reached nearly USD 99 delivered to Indian ports according to Argus data, a 70 per cent surge since the conflict began. These represent structurally different regional exposure to the same conflict, and they tell you immediately that no single number captures this crisis.

The divergence runs deeper than price. The crude that normally transits the Strait ranges from light grades like Murban to medium and heavy sour barrels: Arab Light, Basra Medium, Kuwait Export. The heavier grades dominate the lost volumes. Asian complex refineries were built to process these specific blends. They cannot easily and cheaply substitute light sweet alternatives like Bonny Light or WTI at scale without yield penalties and reconfiguration. The shortage is not just in volume. It is in the specific chemistry that Asia’s refining infrastructure requires. This is why Dubai crude has blown out to a USD 50 premium over WTI, against a normal spread of USD 5 to 8. Grade mismatch and refinery configuration are driving the spread, amplified by scarcity premia and freight dislocation.

Who absorbs the crude hit

Asia absorbs the sharpest immediate impact. About 84 per cent of crude shipments through Hormuz in 2024 were destined for Asian markets. There is no quick rerouting for volumes of this scale, and the replacement barrels are the wrong grade.

Europe is not insulated. It is badly exposed through gas and middle distillates. Up to 3 million barrels per day of Gulf refining capacity is at risk or shut, and the tightest product markets globally are now in diesel and jet fuel, not crude. Europe has some inventory cover and the IEA’s record 400 million barrel emergency release, but calling it “buffered” overstates the position.

The United States is best placed on supply. Domestic production sits at 13.6 million barrels per day. The Strategic Petroleum Reserve has committed 172 million barrels. Venezuelan heavy crude imports surged to their highest level since late 2024 in the week to 13 March, with Gulf Coast complex refineries absorbing barrels at steep discounts to WTI. But supply insulation is not price insulation. US gasoline is approaching USD 4 per gallon and diesel has crossed USD 5.

The cascade most people are missing

The oil price, however visible, is the easier layer to track. What most commentary misses is the downstream cascade, and this is where the crisis becomes structural.

Sulphur is a byproduct of oil refining and natural gas processing. Around half of global seaborne sulphur trade moves through the Strait. When Gulf refineries shut and gas plants close, sulphur supply does not become expensive. It stops. There is no strategic sulphur reserve. Sulphur feedstock prices have surged sharply since the conflict began, with some regional benchmarks more than doubling.

Sulphur matters because sulphuric acid is how the world processes copper, nickel, cobalt, and zinc. It is how phosphate rock becomes fertiliser. It is also critical in semiconductor fabrication and battery precursor manufacturing. The sulphuric acid market is a byproduct market. You cannot ramp it independently of the upstream processes that generate it. When the Gulf goes offline, the acid supply chain breaks with no short term substitute.

Fertiliser is the next transmission channel. More than 30 per cent of global seaborne fertiliser trade passes through the Strait. Gulf countries account for more than 40 per cent of seaborne urea exports and more than a quarter of global ammonia exports. Urea spot prices have surged nearly 40 per cent to around USD 700 per metric ton since the blockade began. More than 1.1 million metric tons of fertiliser cargo are physically stranded in the Gulf, with major producers including QatarEnergy declaring force majeure. China, which the market expected to fill the gap, has instead moved in the opposite direction: Beijing restricted exports of nitrogen-potassium blends in mid-March, maintained urea export quotas, and industry sources say the bans are unlikely to lift before August.

There is a second fertiliser channel that gets even less attention. Urea and ammonia production require natural gas as feedstock. With Qatari LNG halted and Gulf gas infrastructure under attack, fertiliser plants in India, Pakistan, Bangladesh, and Egypt are cutting output because they cannot source the gas to run their reactors. These are separate transmission channels: the sulphur chain breaks phosphate production, and the gas chain breaks nitrogen production. Both hit simultaneously.

Northern Hemisphere farmers are entering planting season. The food price impact is not hypothetical. It is a matter of weeks.

Africa is not one story

For Africa, this crisis cuts across every layer, but it does not cut evenly. About 600,000 barrels per day of oil products that normally flow to the continent from the Middle East are at risk. African refining capacity had already shrunk by about a third over the past two decades before Dangote came online. No African country is a full member of the International Energy Agency. There is no coordinated emergency reserve system. Many economies are operating on weeks of supply.

Consider Nigeria. The Dangote refinery in Lagos, at 650,000 barrels per day the largest single-train refinery in the world, gives Nigeria a domestic buffer most of Africa lacks. The refinery’s management has pledged to prioritise domestic supply. Yet it receives about five crude cargoes per month from NNPC, well short of the thirteen it needs. To fill the gap, it sources crude internationally. Nigerian grades are running USD 3 to 6 above Brent. After freight, crude lands at between USD 88 and 91 per barrel. Pump prices have surged from around 840 naira to above 1,200 naira per litre. The paradox is direct: Africa’s largest oil producer, with the continent’s largest refinery, cannot fully shield its consumers from a Gulf war.

Now consider Kenya. Kenya does not refine crude. Its Mombasa refinery has been dormant for years. The country imports all of its fuel, roughly 100,000 barrels per day, as finished refined products under a government-to-government deal with Saudi Aramco, Emirates National Oil Company, and Abu Dhabi National Oil Company. The benchmark that underpins Kenya’s Gulf supply contracts is not Brent. The contracts price against S&P Global Platts product assessments for the Arab Gulf region, but those product prices are themselves derived from crude feedstock costs. ADNOC, one of the three G-to-G suppliers, refines Murban crude to produce the diesel and jet fuel Kenya buys. Kenyan energy analysts and media track Murban as the reference crude for these deliveries, and for good reason: Murban futures surged above USD 116 per barrel by early March, while Cash Dubai, the physical crude pricing benchmark for the wider Gulf complex, hit a record above USD 150 on 16 March. The G-to-G arrangement replaced an earlier open tender system and operates on 180-day letters of credit, a structure designed to manage dollar demand and de-risk banks from FX exposure on import financing. But a 180-day LC costs multiples of a 30-day instrument, and in a war-risk environment, confirmation and financing charges widen further. Kenya’s actual fuel cost is therefore the Platts product benchmark plus 180-day LC financing plus ocean freight plus war-risk insurance plus the shilling-dollar exchange rate. The commodity benchmark, freight, and insurance layers have all moved sharply since 28 February. Freight rates have quadrupled. War-risk insurance premiums have jumped tenfold in some lanes. Kenya requires importers to hold just 21 days of operational stock, against the IEA benchmark of 90 days. Bloomberg reports that Kenya’s biggest fuel suppliers are already rationing product, with distributors experiencing stock-outs in rural areas. The loss of a single cargo puts the country on a countdown. Bloomberg data shows Kenya’s top fuel origins as UAE, Oman, and India. The Indian supply may appear to diversify the chain, but Indian refineries, Reliance Jamnagar chief among them, have processed large volumes of Russian and Gulf crude for re-export. Kenya’s India-origin imports therefore carry embedded exposure to those same supply chains. The exposure chain extends through intermediaries; it does not break. East and southern Africa receive about 75 per cent of their fuel imports from the Middle East. The headline Brent price materially understates the actual cost and supply risk these economies face.

Then consider Zambia. Landlocked, with no proven crude reserves, Zambia imports all of its fuel. Since March 2023, the 1,710 kilometre TAZAMA pipeline from Dar es Salaam to Ndola has carried finished diesel rather than crude feedstock, after the government converted the pipeline and Indeni ceased refining operations. The remainder of Zambia’s supply arrives as finished products trucked overland from Dar es Salaam or South Africa. All of it comes from or prices against Gulf benchmarks. Ocean freight to Dar es Salaam has surged, and the underlying commodity price has risen sharply since 28 February. The cost pressure compounds at every point in the chain. On 19 March, the Ministry of Energy disclosed that diesel stocks, including volumes in transit at Kigamboni in Dar es Salaam, stood at 285 million litres, or roughly 56 days of cover at current consumption. Petrol cover was thinner at 23 days, kerosene at just over nine. Two observations: the government’s reassurance cited crude prices rising “from US$78 to US$94 per barrel,” a figure consistent with Brent as of early March. By 19 March, Brent itself had risen above USD 110. Both Zambia’s and Kenya’s fuel pricing formulas use Platts Arab Gulf product assessments as the base cost. Those product assessments are driven by the Gulf crude complex: Cash Dubai, Oman, and Murban, which in normal markets trade within a few dollars of each other. Cash Dubai physical was assessed above USD 150 on 16 March. Oman settled at USD 152.58. Murban futures, which traded above USD 116, sit lower because the futures market prices a resolution that the physical market has not yet seen. The product prices sit higher still, because they include refining margins on top of crude. The gap between the government’s reference point and the market Zambia actually buys from is wider than any single number suggests. And the 56-day diesel figure includes stocks physically located in Tanzania, not yet in the country. If the ocean route into Dar is disrupted or delayed by war-risk repricing, those transit barrels are not available.

On sulphuric acid, Zambia’s position is more nuanced than either the global narrative or the aggregate statistics suggest. Zambia has significant installed capacity for acid production as a byproduct of copper smelting: Kansanshi alone generates more than a million tonnes per year, and the country banned acid exports in September 2025. On paper, that looks comfortable. In practice, the system is fragile. KCM and Mopani are operating well below historical capacity. Planned smelter shutdowns have left acid production choppy, and industry sources indicate KCM faced acid shortfalls in 2025 and was reportedly importing sulphur to supplement captive production. Zambia was already importing acid from South Africa before this crisis began. The Copperbelt historically worked as a cross-dependent system between operations, and that system is degraded. The DRC faces the sharper immediate squeeze: its copper oxide leaching operations depend on imported sulphur from the Middle East, and Robert Friedland, chairman of Ivanhoe Mines, warned on 2 March that over 90 per cent of sulphur imported into Africa comes from the Gulf and that oxide operations could face closure within three weeks. But Zambia’s cushion is thinner than the installed capacity numbers imply, and any prolonged disruption to sulphur or acid supply chains through Dar es Salaam or South Africa would expose that fragility. Zambia’s primary exposure in this crisis, however, runs through fuel import costs, fertiliser input prices, and the pressure these place on foreign exchange reserves at exactly the moment the kwacha can least afford it. Zambia does produce fertiliser domestically, and the picture has shifted meaningfully. Nitrogen Chemicals of Zambia expanded its blending and granulating capacity six-fold to over 430,000 metric tonnes per year by 2025. Separately, United Capital Fertilizer commissioned Zambia’s first domestic urea manufacturing plant in October 2025, a USD 641 million coal-gasification facility with plans to double capacity to 1.6 million tonnes per year. Because UCF synthesises urea from coal rather than natural gas, it is partially insulated from the Gulf gas disruption. The government’s self-sufficiency target is 2026. But the transition is not yet complete. Zambia imported nearly 800,000 tonnes of fertiliser in 2024, and NCZ’s blending operations still require phosphate and potash sourced from global markets. Those markets have tightened sharply: Gulf fertiliser shipments are stranded, urea spot prices have surged nearly 40 per cent to USD 700 per tonne, and China, which the market had expected to fill the supply gap, moved in mid-March to restrict exports of nitrogen-potassium blends while maintaining existing urea export quotas. The Gulf is blocked. China has shut the door. The two largest potential sources of replacement supply are unavailable simultaneously. Under Zambia’s current e-voucher FISP system, higher input prices do not automatically raise the subsidy bill within the current season, but they compress voucher purchasing power, force supplementary procurement at elevated prices, and will feed directly into tender pricing for the next season. The fiscal exposure is real; the transmission is policy-mediated rather than mechanical, which delays the pressure but does not eliminate it.

The architecture question

There is a deeper structural point that has received almost no attention outside specialist maritime circles.

Kinetic force alone does not maintain the effective closure of the Strait of Hormuz. Insurance does. When the P&I clubs belonging to the International Group issued 72-hour cancellation notices for war-risk coverage in early March, they made transit commercially prohibitive for most operators. The Group’s twelve member clubs insure roughly 90 per cent of the world’s ocean-going tonnage. Without their coverage, most commercial ships will not sail, most ports will not accept them, and most banks will not finance cargo.

The US response was not a carrier strike group. It was the announcement of a USD 20 billion maritime reinsurance facility through the International Development Finance Corporation, with Chubb as lead underwriter. The facility has not yet been activated. That distinction matters. The United States has built the mechanism to serve as insurer of last resort for shipping through the world’s most critical chokepoint, but it has not turned it on.

Whether by design or by default, this creates a structural reality: the US now holds a dormant lever over the financial architecture that governs passage through the Strait. Holding a mechanism and activating it are different decisions, and the gap between the two is where the leverage sits. China could conceivably self-insure its own fleet through sovereign-backed arrangements. But for now, every downstream calculation, from sulphur to fertiliser to mining inputs, is contingent on when and whether the insurance architecture is activated.

For those of us who have spent years arguing that financial architecture determines economic outcomes, this should not be surprising. Structure precedes sentiment. And the countries that build the architecture hold the options.

The signal

The headline is oil. The story is what oil enables downstream: fuels, fertiliser, sulphuric acid, mining inputs, food systems. The question most people are not asking is who controls the architecture that determines when those flows resume, and on what terms.

We are not all in this together. We never were.

Sourcing note: Price data from S&P Global Platts, Argus Media, and Bloomberg. Trade flow and capacity data from the US Energy Information Administration, International Fertiliser Development Centre, and UN COMTRADE. African country data from the African Development Bank, Zambian Ministry of Energy (19 March 2026 statement), Kenya’s Energy and Petroleum Regulatory Authority, and company disclosures. Insurance data from the International Group of P&I Clubs, gCaptain, and Reuters.

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About the Author

Dean N. Onyambu is the Founder and Chief Editor of Canary Compass, a financial research publication focused on African monetary architecture and financial sovereignty. He brings 18 years of experience across trading, fund leadership, and economic policy, with senior roles at Standard Bank, First Capital Bank, and Opportunik Global Fund.

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