Estimated reading time: 4 minutes
Beijing Urges End to Hostilities as Hormuz Disruption Rattles Oil, LNG, and Agricultural Supply Chains
China called on March 19 for an immediate end to hostilities in the Gulf, warning that ongoing fighting linked to the U.S.-Israeli conflict with Iran is threatening global energy supply and key maritime trade routes, including the Strait of Hormuz, through which a large share of the world’s oil, liquefied natural gas, and fertiliser cargo moves each year.
Beijing simultaneously signalled readiness to cooperate with Southeast Asian nations on energy security, as supply cuts begin to bite across a region of roughly 700 million people that depends heavily on steady fuel and agricultural input imports.
Hormuz at the Centre of Supply Chain Anxiety
The Strait of Hormuz, a narrow waterway connecting the Persian Gulf to the Gulf of Oman, is one of the world’s most critical maritime chokepoints. Any sustained disruption to navigation there can delay tanker and dry bulk shipments, push spot freight rates higher, and trigger price increases across global commodity markets.
Chinese officials stated that countries involved in the conflict must halt military operations to prevent further economic damage, and that safe navigation on key sea lanes must be preserved. The statement reflects Beijing’s dependence on stable Gulf energy flows to power its manufacturing sector, but also its interest in positioning itself as a regional stabilising force.
According to the United Nations, around 3 to 4 million tonnes of fertiliser trade per month has been disrupted by supply cuts and shipping problems arising from the conflict. The UN estimates this could leave up to 45 million people facing food shortages as agricultural input costs rise and planting decisions are affected.
Fertiliser Markets Squeezed from Multiple Directions
Natural gas, which accounts for more than 70 percent of production costs for nitrogen fertilisers, has become more expensive as Gulf supply uncertainty spreads through energy markets. The resulting cost pressure is feeding directly into the price of urea, ammonia, and other nitrogen products that farmers across Asia, Africa, and Latin America rely on.
China is a significant player in the global fertiliser market, supplying approximately 18 percent of fertiliser imports to countries such as the Philippines. That position makes Beijing’s trade policy choices consequential for regional food security, particularly when alternative supply sources face their own logistical constraints.
Earlier this month, Beijing moved to restrict exports of diesel, gasoline, and jet fuel to protect domestic supply, and separately tightened controls on fertiliser exports. Chinese officials indicated the country will continue to supply some fertiliser to international markets while prioritising its own demand, a formulation that leaves trading partners with limited visibility on available volumes.
Southeast Asia Faces a Structural Test
The conflict is accelerating a realignment of energy and commodity diplomacy across Southeast Asia. Recent engagement between Chinese officials and the Philippines suggests growing bilateral economic cooperation, even as the two countries continue to manage competing maritime claims in the South China Sea.
China is also promoting renewable energy and nuclear power as long-term alternatives to Gulf oil and gas dependence, a message that resonates with governments across the region looking to reduce import vulnerability. However, analysts note that the transition away from fossil fuels in Southeast Asia is measured in decades, not years, leaving most countries exposed to near-term supply volatility.
For carriers and forwarders operating in the region, the immediate concern is cargo availability and routing reliability. Tanker operators and bulker owners serving Gulf loading ports face elevated war risk insurance premiums and potential detour costs if Hormuz traffic is diverted or delayed. LNG charterers supplying power generators and industrial users across Southeast Asia face similar uncertainty on both price and schedule.
The conflict also carries implications for project cargo and breakbulk operators, many of whom move fertiliser plant components, power generation equipment, and infrastructure materials through Gulf ports serving Iran, Iraq, Kuwait, and the United Arab Emirates.
No timeline for a resolution has been established. Chinese officials did not specify what diplomatic steps Beijing is prepared to take beyond its public call for a ceasefire.
