Some readers may know that, alongside Macrosfera, I also run a small commodities business focused on vanilla beans. Spending time around physical products has made me increasingly interested in the inputs sitting behind the commodities we normally talk about. So I thought I would start a short series on those less visible links in the chain: The Commodity Behind the Commodity.
The first is sulphur.
Instability across the Gulf and wider Middle East is usually discussed through the lens of oil. The region contains some of the world's most important oil and gas infrastructure, while the Strait of Hormuz remains one of the most important shipping routes in the global economy. As the conflict has intensified, attention has naturally turned to crude prices, tanker movements and fuel shortages. Sulphur has received far less attention, even though many of the same attacks on refineries, gas-processing plants, pipelines and shipping routes are affecting the amount reaching the global market.
Most sulphur is not produced from dedicated sulphur mines (although the volcanic mining at Kawah Ijen is a fascinating read if you're interested in the subject). It is recovered during oil refining and natural-gas processing. Crude oil and gas naturally contain sulphur compounds that have to be removed to meet fuel standards and limit harmful emissions. Once separated from those hydrocarbons, the sulphur can be recovered as a solid industrial product and sold into industries ranging from chemicals and mining to fertiliser manufacturing.
Its supply is therefore tied unusually closely to another industry. If a copper mine is damaged, the connection with copper production is obvious. With sulphur, it is less visible. A refinery primarily exists to produce petrol, diesel or jet fuel, but in processing crude it also recovers sulphur. Gas-processing plants do much the same with sulphur contained in natural gas. Damage those facilities, force them offline or simply reduce the amount of hydrocarbon passing through them, and sulphur output falls as well.
In March, consultancy IIR estimated that around 1.9 million barrels per day of Gulf refining capacity had been shut, with outages across Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia and the UAE. Kuwait's three refineries were also reported to have reduced processing rates as storage filled. S&P Global's Energy Security Sentinel later recorded 40 attacks involving refinery infrastructure during the first six months of 2026, the highest refinery-related tally in its dataset.
The link with sulphur is not hypothetical. Attacks on Qatar's Ras Laffan complex damaged two LNG trains and a gas-to-liquids facility. QatarEnergy subsequently said that output of several products from the complex had been materially reduced, including sulphur. By September, around 17% of Qatar's LNG capacity was still disabled, with some of the damaged infrastructure expected to take years rather than months to repair. So the shortage is not just a shipping problem. In some cases, less sulphur is actually being recovered in the first place because the plants that normally produce it as a by-product are damaged or running below previous capacity.
Nor can producers respond to a high price as easily as they might with a mined commodity. A refinery cannot simply decide to double sulphur production because the market has become attractive. Output depends on how much crude is being processed and how much sulphur that crude contains. Gas-processing plants face the same constraint. If less hydrocarbon passes through the facility, there is less sulphur to strip out and sell.
Then there is the problem of getting it out of the Gulf: Shipping has become more expensive and unpredictable as the security situation has deteriorated. Shipowners face greater risk, insurance costs rise and vessels may have to wait, alter routes or use more complicated arrangements to move cargo. Reuters reported that only 17 commodity vessels crossed the Strait of Hormuz during one September weekend, down from 37 the previous week and compared with roughly 125 large commercial vessels passing through the Strait each day before the war. The disruption has also reached infrastructure designed specifically to reduce dependence on Hormuz. Saudi Arabia's East–West Pipeline carries crude from the Gulf side of the country to the Red Sea port of Yanbu, allowing exports to bypass the Strait. A drone attack in September damaged three pumping stations and forced the pipeline offline. Operations restarted on 22 September, initially at a reduced rate, with full capacity expected to take several weeks to restore.
Alternative routes matter most when the main route is already under pressure. If Hormuz is difficult to use and the infrastructure meant to bypass it is also damaged, producers lose some of the flexibility that would normally soften the disruption. Saudi Arabia responded by moving more crude through its eastern Gulf terminals and making greater use of ship-to-ship transfers outside the Strait.
Those workarounds have become expensive. Reuters reported that ship-to-ship transfers around Oman had expanded sharply by September, while freight costs for some very large crude carriers had risen above $30 per barrel. Sulphur moves in a different shipping market, so those tanker rates are not sulphur freight rates, but the wider pressure is relevant. Restricted routes, scarcer vessel availability, additional handling and higher insurance all increase the cost of moving bulk commodities out of the region.
The sulphur market is therefore dealing with two problems at once: less material being recovered in parts of the Gulf, and a higher cost of moving the material that remains. Prices have reflected both. Before the war, sulphur delivered into Brazil was around $525 per tonne. By late May, S&P Global was assessing Middle Eastern sulphur at a record $815–820 per tonne FOB, while the Brazilian CFR assessment had reached roughly $1,200 per tonne. In some markets, the cost had more than doubled within a matter of months.
The distinction between FOB and CFR is useful here. FOB, or free on board, broadly refers to the price at the export port before the main ocean freight is included. CFR, or cost and freight, includes the cost of carrying the commodity to the destination port, although not marine insurance.
A fertiliser producer in Brazil, India or Indonesia does not really care what sulphur costs sitting at a Gulf terminal. What matters is the price once it reaches the plant. If material is worth around $820 per tonne at the export point but roughly $1,200 delivered into Brazil, logistics have become a meaningful part of the problem as well. But replacing Gulf supply is also easier in theory than in practice. A buyer can look elsewhere, but alternative tonnes may come from much further away and arrive later. Longer voyages, tighter vessel availability and competition for replacement cargoes all add to the cost. Lower production and more difficult shipping are much harder to manage together than either would be on its own.
The story becomes more important to usall once sulphur leaves the energy market altogether and makes it way into our food chain.
One of its most important uses is the production of sulphuric acid, which is central to processing phosphate rock into phosphoric acid. That phosphoric acid eventually becomes phosphate fertilisers such as diammonium phosphate, or DAP, and monoammonium phosphate, or MAP. The volumes involved are large. Mosaic, one of the world's major phosphate producers, has said that producing ten tonnes of DAP or MAP requires roughly four tonnes of sulphur. A sharp rise in sulphur prices can therefore change the economics of an entire fertiliser plant rather than simply adding a minor input cost.
By May, some producers were already responding. Egypt's EFIC halted production at granular single-superphosphate plants, citing high sulphur costs, while Mosaic temporarily curtailed parts of its Brazilian phosphate operations as sulphur supply tightened and raw-material costs rose. Producers increasingly faced a choice between buying sulphur at record prices or reducing output.
From there, the pressure moves into agriculture. More expensive sulphur raises the cost of sulphuric acid, which squeezes phosphate producers. If plants reduce operating rates, there is less fertiliser available or it becomes more expensive, sometimes both. The timing is slow enough that the original shock can easily disappear from view. A refinery or gas-processing facility is hit today. Less sulphur is recovered. Fertiliser manufacturers face higher costs over the following weeks or months. Farmers may not see the full effect until they buy inputs for the next planting season. By then, the attack that started the chain may no longer be attracting any attention.
How farmers respond varies. Some absorb the cost through lower margins. Others use less fertiliser, switch crops or delay other spending. Large farms with access to credit can likely handle a temporary increase more easily than smaller producers working with limited cash flow.
You see this dynamic play out even in niche corners of the market. For me, importing vanilla beans, you wouldn't immediately think a Qatari LNG outage matters. But when fertilizer and transport costs spike across rural growing regions, smallholder farmers face the same margin squeeze as massive producers. Higher baseline costs quietly bleed into prices months later.
Expensive phosphate fertiliser does not automatically mean lower yields. Soil conditions, rainfall, crop choice and previous nutrient application all matter. But phosphorus is one of the main nutrients required for plant growth. If high prices repeatedly cause farmers to apply less than they otherwise would, productivity can eventually suffer.
Governments can cushion the effect through subsidies, although the cost does not disappear. India, for example, spends heavily to shield farmers from international fertiliser prices. When imported fertiliser becomes more expensive, the government either allows more of the increase to reach farmers or absorbs more of it through the public budget. A shock that started with damaged energy infrastructure can end up affecting fiscal policy months later.
The chain also says something about what resource security actually means. Morocco possesses some of the world's largest phosphate reserves and has built a major fertiliser industry around them. China is another enormous phosphate producer. Yet both still require large quantities of sulphur. Owning the phosphate is only part of the advantage. You still need the inputs and infrastructure to turn it into fertiliser.
The same problem appears elsewhere in commodity markets. A country can mine lithium but lack the refining capacity needed to make battery material. It can export crude oil while importing petrol or diesel. It can possess large phosphate reserves while remaining dependent on imported sulphur. Looking only at who owns the raw material misses a large part of the picture.
Sulphur also raises a stranger long-term question. Much of today's supply exists because the world processes enormous quantities of fossil fuels. Refineries and gas plants have to remove sulphur from hydrocarbons, leaving behind a by-product that agriculture, mining and the chemicals industry have come to depend on.
At the same time, the global economy is trying to use fewer fossil fuels.
If oil refining and gas processing decline substantially over the coming decades, one of the world's major sources of sulphur could decline with them. Demand for sulphuric acid, meanwhile, may remain strong because it is also widely used in mining and mineral processing, including parts of the supply chain for batteries and electrification. There is an odd tension here. Decarbonisation could reduce one source of sulphur while some of the industries associated with the energy transition continue to demand it. Agriculture may end up competing more directly with mineral processing for an input that has historically been supplied almost incidentally by the fossil-fuel economy.
There are alternatives. Pyrite, an iron sulphide mineral, was once a much more important source of sulphuric acid before recovered sulphur from oil and gas came to dominate supply. Persistently high prices could make it attractive again, although current volumes are nowhere near enough to replace Gulf supply quickly.
Some fertiliser producers can import sulphuric acid directly instead of buying elemental sulphur and producing the acid themselves. That offers flexibility, but it does not remove the underlying dependency. The acid still has to be produced somewhere, and moving a highly corrosive liquid brings its own logistical problems. A different response is to reduce how much newly processed phosphate is needed. Large quantities of phosphorus leave the food system through sewage, animal manure and food waste. Recovering more of it and returning it to agriculture would reduce the amount of fresh phosphate rock that needs to be treated with sulphuric acid. Better soil testing and more precise fertiliser application can also reduce unnecessary use. Researchers are also exploring other ways of processing phosphate rock too. Organic acids such as oxalic and citric acid can release phosphorus, while certain microorganisms can perform similar processes biologically. None is close to replacing conventional sulphuric-acid processing across global agriculture today. The scale is simply too large. But economics changes with price. A method that makes little sense when sulphur is cheap starts to look more interesting when the conventional input is trading near or above $1,000 per tonne.
For now, the immediate question for everyone is the same and simple: how long do Gulf processing and shipping remain constrained? If refinery and gas-processing capacity returns and freight conditions normalise, some of the pressure on sulphur should ease. But the episode has already exposed a dependency that is easy to miss. A large part of the world's phosphate industry relies on a by-product of oil and gas processing, much of it produced in a region where both the plants and the routes that move it have come under attack.
That is what makes sulphur interesting. It may never replace oil in the headlines, but the price of a commodity few people follow can still quietly shape the economics of one that matters enormously to farmers and, ultimately, to us all as consumers.
References
Reuters, 17 September 2026. Three pumping stations along Saudi East-West Pipeline were hit in recent attack, sources say.
https://www.reuters.com/business/energy/three-pumping-stations-along-saudi-east-west-pipeline-were-hit-recent-attack-2026-09-17/
Reuters, 22 September 2026. Saudi Arabia restarts East-West oil pipeline, sources say.
https://www.reuters.com/business/energy/saudi-arabia-restarts-east-west-oil-pipeline-resume-exports-yanbu-sources-say-2026-09-22/
Reuters, 24 September 2026. Houthis say they attacked Riyadh and Aramco facilities in Yanbu.
https://www.reuters.com/world/middle-east/houthis-say-they-attacked-riyadh-aramco-facilities-yanbu-2026-09-24/
Reuters, 21 September 2026. Vessels trickle through Strait of Hormuz as Middle East conflict persists.
https://www.reuters.com/world/middle-east/vessels-trickle-through-strait-hormuz-mideast-tension-persists-2026-09-21/
Reuters, 17 September 2026. Number of ships transiting Strait of Hormuz falls to three on Wednesday, data shows.
https://www.reuters.com/world/middle-east/number-ships-transiting-strait-hormuz-falls-three-wednesday-data-shows-2026-09-17/
Reuters, 21 September 2026. Hormuz shuttles keep oil flowing, but at a high cost.
https://www.reuters.com/commentary/reuters-open-interest/hormuz-shuttles-keep-oil-flowing-high-cost-2026-09-21/
Reuters, March 2026. Reporting on the shutdown of Gulf refining capacity and damage to Qatar's Ras Laffan energy complex.
https://www.reuters.com/business/energy/qatars-energy-boss-says-he-had-warned-dangers-provoking-iran-2026-03-20/
https://www.reuters.com/business/energy/qatar-shuts-gas-liquefaction-will-take-weeks-restart-sources-say-2026-03-04/
S&P Global Energy, 2026. Middle East Conflict — Energy Security Sentinel.
https://www.spglobal.com/energy/en/news-research/special-reports/crude-oil/energy-security-sentinel/middle-east-conflict
S&P Global Energy, 7 May 2026.Global sulfur prices surge on Middle East disruptions, China export ban.
https://prod.spglobal.com/energy/en/news-research/latest-news/agriculture/050726-global-sulfur-prices-surge-on-middle-east-disruptions-china-export-ban