Beyond Oil: The Hormuz Chokehold on Food and Finance
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May 29, 2026
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May 29, 2026
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May 29, 2026
■ KFSC MACRO INTELLIGENCE COMMENTARY · 5-7 MIN READ
Beyond Oil: The Hormuz Chokehold on Food and Finance
By Emmelis Keaney, MSF, RFC® · Executive Vice President, Keaney Financial Services Corp
May 29, 2026 · Iran war, Hormuz disruption, fertilizer, food security, gold
The Strait of Hormuz is not only an oil route. It is also a fertilizer, a source of ammonia, liquefied natural gas, and a food-security route. An important detail that some people may not know is that the Strait of Hormuz did not immediately become completely physically impassable in the early phase of the conflict. The market disruption was not initially caused by military blockades. Although some ships physically could pass through the strait, many operators could not secure insurance, financing, or acceptable risk protection for crews and cargo. In effect, shipping activity slowed because the financial system supporting trade ceased functioning as it had.
The UN Conference on Trade and Development (UNCTAD) describes Hormuz as a “critical artery” that carries about one-quarter of seaborne oil and important fertilizer flows.[1] When that route is restricted, countries do not just face higher fuel prices. They can face other risks, such as a “liquidity crunch”.
As in a normal household, a “liquidity crunch” means buyers suddenly need more cash to buy the same basic goods. For example, if oil, shipping, insurance, and fertilizer prices rise simultaneously, import-dependent countries must spend more U.S. dollars quickly. Poorer countries may not have sufficient foreign currency reserves (on hand), so they resort to delaying purchases, cutting back on imports, borrowing at higher rates, or seeking emergency financing (for example, from the IMF or World Bank).
■ FERTILIZER
The risk that runs through the food system
The fertilizer risk is especially serious, and I’ve discussed it many times in our private one-on-one conversations with clients since the war broke out. Fertilizer is farm input, not a luxury item. If farmers cannot afford enough urea, ammonia, phosphate, or sulfur-based fertilizer, crop yields can fall. Rystad Energy, an independent energy research firm, estimated that exporters affected by the Hormuz closure account for 15% of global ammonia trade and 21% of global urea trade (Rystad Energy, 2026).[2] Urea is a high-nitrogen fertilizer used to help crops grow. Ammonia is a key building block for many fertilizers.
The Financial Times reported that sulfur prices rose sharply as the Iran war squeezed supplies, forcing some fertilizer producers to cut phosphate fertilizer output.[3] This is a critical fertilizer used for major crops such as corn, rice, soybeans, and wheat. Therefore, as fertilizer becomes more expensive or unavailable, farmers may plant fewer crops, fertilize less, or produce weaker harvests in the coming seasons.
■ FOOD SECURITY
An already dangerous moment for fragile countries
It is all happening at a dangerous time. The World Food Programme warned that food insecurity is expected to remain at “alarming levels” in 2026.[4] Countries already facing severe food stress include Sudan, Gaza, Yemen, South Sudan, Somalia, Haiti, Afghanistan, the Democratic Republic of Congo, Ethiopia, and parts of the Sahel. These are countries already vulnerable due to preexisting conflict, weak currencies, high import bills, drought, and poor infrastructure, all of which make food systems fragile.
The risk is not only famine. It is also an extended agricultural difficulty. Countries that depend heavily on imported fertilizer, fuel, and grain can suffer even without formally declared famine. India, Bangladesh, Pakistan, Egypt, Kenya, Nigeria, and many Sub-Saharan African countries may face higher farm costs if fertilizer and energy prices stay elevated. The poorer the farmer, the harder it is to absorb the shock.
But it’s not just lower-income countries that are the most vulnerable to fertilizer shock. To give you an idea, between 2019 and 2023, Australia imported 90% of its nitrogen fertilizers and close to 70% of its phosphate fertilizer needs.[5]
■ GOLD
How gold has behaved in this environment
Gold usually benefits from this type of environment in the short term. Investors often buy gold when they fear war, inflation, currency weakness, or financial stress. The World Bank said energy prices are projected to rise by 24% in 2026 due to the Middle East war shock.[6] Higher energy prices can feed inflation, and inflation often supports gold demand.
Gold has already behaved like a crisis asset. As of May 26, 2026, front-month Comex gold settled around $4,500 per ounce, still far above year-earlier levels, even though it pulled back from its January 2026 record high.[7] This tells us gold is not moving in a straight line. It rallies during panic, then cools when investors expect a ceasefire, a stronger dollar, higher interest rates, or need US dollars to purchase resources. (See Ernesto’s analysis on this price dynamic: GOLD’S PULLBACK AND TODAY’S CEASEFIRE NEWS | Keaney Financial Services Corp.)
In the long term, gold may remain supported if three conditions persist: prolonged geopolitical conflict, higher government debt, and continued central bank reserve asset diversification. However, gold is not guaranteed to rise. If the Iran conflict eases, real interest rates rise, or investors return to risk assets, gold could fall sharply.
■ HISTORICAL CONTEXT · PORTFOLIO
Comparisons from past shocks and what this means for portfolios
History offers some useful comparisons for context. During the 1970s oil shocks, concerns about energy supply helped fuel inflation and supported gold. During the 2008 financial crisis, gold eventually benefited from fear, central-bank easing, and distrust of financial institutions. During Russia’s 2022 invasion of Ukraine, energy, grain, and fertilizer markets also experienced disruption, showing how war can move food, fuel, and metals markets.
For portfolios, gold can serve as a defensive allocation, especially for investors worried about inflation, currency stress, war, or food-security shocks. It does not produce income, so the KFSC Risk Managed Strategies see it as a risk hedge. While it’s a core position, it is not the entire strategy. A diversified portfolio may use gold alongside energy infrastructure, defense, agriculture, cash, short-duration bonds, and high-quality equities at different times, and considers position sizing as an important factor.
■ SUMMARY
In summary, the Iran war and Hormuz disruption have created liquidity crunches because import-dependent countries suddenly need more dollars for oil, fertilizer, food, shipping, insurance, and other resources across industries worldwide. Fertilizer shortages can reduce crop yields and worsen food insecurity, especially in already fragile countries. Gold (and silver, I should add) is behaving as expected. It has benefited from similar environments in the past over the long term; it remains volatile in the short term, as one would expect, similar to past events and global conflicts.
Footnotes
Keaney Financial Services Corp does not produce forecasts.
Forward-looking figures referenced in this commentary, including the World Bank energy price projection for 2026 and the World Food Programme food insecurity outlook for 2026, are produced by third-party data providers and are subject to revision by those providers. Keaney Financial Services Corp does not originate forecasts. The firm’s role is analysis and contextualization of third-party data and observation of historical patterns.
REFERENCES IN ORDER OF APPEARANCE
1. Compliance Disclosures and Risk Warnings
This commentary is published by Keaney Financial Services Corp for educational and informational purposes only. It is a diagnostic read of current market conditions. It is not investment advice, a recommendation to buy or sell any security, an offer or solicitation, or a guarantee of any outcome. Past performance is not indicative of future results, and do not guarantee future returns. All investments involve risk, including the possible loss of principal. Markets can be volatile and values can fluctuate due to economic, geopolitical, regulatory, and other factors. Readers should consult their own financial, legal, and tax advisors before making investment decisions. Keaney Financial Services Corp and its representatives do not guarantee the accuracy or completeness of any third-party data referenced herein.
2. Framework and Risk Management Disclosure
This commentary references commodity markets (gold, silver, oil, ammonia, urea, phosphate fertilizer, sulfur), sovereign and emerging-market credit (in the context of IMF and World Bank emergency financing), fixed income (short-duration bonds), and equity allocation (high-quality equities). Each asset class carries distinct risks:
• Commodities are subject to supply-and-demand shocks, geopolitical disruption, currency moves, weather and crop conditions, and storage and transport considerations. Commodity prices can be highly volatile and may decline materially.
• Sovereign and emerging-market debt can be affected by currency stress, balance-of-payments dynamics, political risk, and access to multilateral financing.
• Fixed income carries interest-rate risk, credit risk, and reinvestment risk. Short-duration positioning reduces but does not eliminate these risks.
• Equities are subject to issuer-specific, sector, market, and macroeconomic risk. Values can decline materially.
Risk identification, regime diagnosis, and drawdown governance are performed through the firm’s analytical frameworks, including the KFSC Macro Regime Model, the KFSC Asset Role Registry, the KFSC Risk Managed Strategies, and the KFSC Drawdown Governance Architecture. These frameworks address risk from distinct analytical angles. Their collective use does not imply any guarantee against loss.
3. Forward-Looking Statements Disclosure
This commentary references forward-looking statements sourced from third-party providers. Specifically:
• The World Bank’s projection that energy prices may rise approximately 24 percent in 2026 due to Middle East war shock, as published in its Commodity Markets Outlook.
• The World Food Programme’s outlook that global food insecurity may remain at “alarming levels” in 2026.
• The conditional scenario referenced in this commentary that gold may remain supported in the long term if three conditions persist: prolonged geopolitical conflict, higher government debt, and continued central bank reserve asset diversification.
• The conditional downside scenario referenced in this commentary that gold could fall sharply if the Iran conflict eases, real interest rates rise, or investors return to risk assets.
All forward-looking figures and outlooks reference third-party sources and are subject to revision by those sources. Keaney Financial Services Corp does not produce forecasts. Forward-looking statements involve assumptions and uncertainties; actual outcomes may differ materially from any projection or scenario described.
4. Allocation and Positioning Disclosure
Gold, silver, and related commodity exposures, where held, may appear within some of our KFSC Risk Managed Strategies. The KFSC Risk Managed Strategies span six allocation profiles, each calibrated to a distinct risk and return objective:
• Preservation of Capital
• Conservative
• Conservative Growth
• Moderate
• Moderate Growth
• Aggressive Growth
Position sizing, asset selection, and holding duration vary by strategy and by macro regime assessment. Inclusion of any reference to an asset class or commodity in this commentary does not imply any specific allocation in any specific strategy. Clients invested in KFSC Risk Managed Strategies should consult their advisor for strategy-specific positioning details.
5. Methodology and Data Disclosure
Data and quantitative claims in this commentary are drawn from the following third-party sources:
• UN Conference on Trade and Development (UNCTAD), for characterization of Hormuz as a critical artery and seaborne oil and fertilizer flow share.
• Rystad Energy, for estimates of ammonia and urea trade exposure to Hormuz disruption.
• Financial Times, for reporting on sulfur pricing and phosphate fertilizer production cuts.
• World Food Programme, for the 2026 food insecurity outlook.
• The Guardian, for Australian fertilizer import share figures covering 2019 through 2023.
• World Bank Commodity Markets Outlook, for the 2026 energy price projection.
• The Wall Street Journal, for the Comex gold settlement price as of May 26, 2026.
Specific quantitative figures referenced in this commentary include: approximately one-quarter of seaborne oil flows transiting Hormuz; 15 percent of global ammonia trade and 21 percent of global urea trade exposed to Hormuz disruption per Rystad Energy; Australia importing approximately 90 percent of nitrogen fertilizers and close to 70 percent of phosphate fertilizer needs between 2019 and 2023; an approximately 24 percent projected rise in energy prices in 2026 per the World Bank; and front-month Comex gold settlement near $4,500 per ounce as of May 26, 2026.
Keaney Financial Services Corp does not originate underlying market data. The firm contextualizes third-party data within the KFSC Macro Regime Model and related analytical frameworks. Source attribution is to the underlying producer of each figure. Integration or publication platforms are referenced separately where applicable.
6. Research, Data, and Technology Disclosure
Keaney Financial Services Corp uses a range of computational tools in the research and production of its commentaries through the KFSC Institutional Intelligence System, including data integration software, statistical analysis tools, charting and visualization software, and large-language-model assistants for drafting, editing, and quality assurance. All analytical interpretations, framework readings, and editorial judgments are reviewed and approved by Keaney Financial Services Corp. The firm does not delegate final analytical responsibility to automated tools. Computational assistance does not change the firm’s diagnostic-not-predictive standard or its compliance posture.
7. Specific Securities Disclosure
This commentary does not name or recommend any specific issuer, security, fund, exchange-traded product, or other investable instrument. References to gold, silver, oil, fertilizer inputs, and other commodities are to physical or futures market constructs in the aggregate, not to any specific issuer or vehicle. References to energy infrastructure, defense, agriculture, short-duration bonds, and high-quality equities describe broad asset categories and not specific holdings. No portion of this commentary should be interpreted as a recommendation to buy, sell, or hold any specific security. Readers should consult their financial advisor regarding implementation suitable to their circumstances.
8. Historical Event Selection and Dataset Disclosure
Historical events referenced in this commentary include:
• The 1970s oil shocks, during which energy supply concerns historically helped fuel inflation and historically supported gold prices.
• The 2008 global financial crisis, during which gold eventually benefited from elevated fear, central-bank easing, and distrust of financial institutions.
• Russia’s 2022 invasion of Ukraine, during which energy, grain, and fertilizer markets experienced documented disruption.
These historical episodes are referenced for contextual comparison only. Past patterns do not establish or imply that current or future events will follow the same trajectory. Each macroeconomic episode has unique characteristics, and historical reference is not predictive of forward outcomes.
9. Statistical Interpretation and Non-Predictive Use Disclosure
All statistical observations, correlations, percentage figures, and historical patterns referenced in this commentary are diagnostic, not predictive. The firm reads from observed historical and current data and offers interpretive frameworks. Correlation does not establish causation; observed pattern recurrence does not guarantee future recurrence. Keaney Financial Services Corp does not claim that any statistical relationship described will continue, reverse, strengthen, or weaken. Readers should not infer specific outcomes from observed patterns.
10. Advisor Discretion Statement
This commentary is a diagnostic read produced by Keaney Financial Services Corp. It does not constitute personalized investment advice. Allocation decisions, position sizing, and timing within any client portfolio are the discretion of the advising representative, applied to the individual client’s circumstances, risk tolerance, time horizon, and objectives.
Models diagnose. Advisors decide. Portfolios implement.
11. Business Entity Disclosure
Keaney Financial Services Corp is an independent advisory firm. Securities are offered through Ameritas Investment Company LLC (AIC), Member FINRA/SIPC. Advisory services are offered through Ameritas Advisory Services LLC (AAS). AIC and AAS are not affiliated with Keaney Financial Services Corp. Representatives of Keaney Financial Services Corp are registered with AIC and AAS as applicable. This commentary is intended for U.S. recipients only unless otherwise indicated.
Models Diagnose. · Advisors Decide. · Portfolios Implement.
KEANEY FINANCIAL SERVICES CORP · KFSC MACRO INTELLIGENCE COMMENTARY · MAY 2026