The Strait of Hormuz is about more than just oil. It feeds 100 million people

By Eleni Giokos, CNN

(CNN) — Oil and liquefied natural gas tankers moving through the Strait of Hormuz carry around 20% of the world’s supply. But for countries on the Persian Gulf, the waterway is more than just an energy route – it’s a lifeline for more than 100 million people.

Now, as the United States and Israel’s war with Iran chokes this vital stretch of water, it’s also straining food supply into the region.

Thriving in this harsh climate takes effort. With summer temperatures topping 50 degrees Celsius (122 Fahrenheit) and little cultivatable land, much of the Gulf Arab states’ drinking water comes from the sea via desalination plants. Most of their food, however, must come from abroad.

Saudi Arabia imports more than 80% of its food, the United Arab Emirates around 90%, and Qatar about 98%. In Iraq, too, the bulk of food imports pass through the Strait of Hormuz, despite the country’s access to two major rivers.

In total, the majority of the food shipments to the region pass through the strait, a passage that is now all but blocked due to attacks on commercial ships in the area.

With the waterway effectively closed, food shippers are scrambling to find alternative routes – routes that are costlier and logistically strained, and that cannot fully replace lost flow, raising the prospect of higher prices and reduced choice for consumers.

Even Iran depends on the Strait of Hormuz for much of its trade.

The World Food Programme (WFP) warns that supply chains may really be on the brink of the most severe disruption since Covid-19 and the start of the full-scale Ukraine war in 2022.

Carl Skau, deputy executive director of the WFP, says shipping costs have risen sharply.

Retailers say that, while there’s no imminent hunger crisis in the Gulf region, the conflict has upended sea freight.

Kibsons International, a UAE-based fresh food and vegetable retailer, imports 50,000 tons of food per year sourcing food from countries like South Africa and Australia and says the focus now is on rerouting shipments.

“At the moment, the supply chain is extremely challenging,” said Daniel Cabral, procurement director at Kibsons.

According to UK Maritime Trade Operations (UKMTO), a British military-run monitoring agency, almost two dozen vessels have been attacked in the region since the start of the war on February 28, including a cargo vessel off the coast of Oman. Shipping companies are therefore unwilling to take the risk of moving through the Strait of Hormuz.

Another issue is the number of vessels already at sea. Kibsons has “tons” of food – mostly fresh – in containers on ships currently waiting outside the strait, Cabral told CNN, with no confirmed arrival dates or even ports. “There is a lot of uncertainty,” he said.

Then there’s the cost of insurance.

The price of doing business

Buried in the fine print of shipping contracts are “wartime clauses” that have now kicked in, Cabral said. These clauses protect ships from entering dangerous territories and give them the right to choose a dropoff port for shipments.

One of Kibsons’ containers, originally destined for Jebel Ali Port in Dubai, is now in Mundra, India. Another was rerouted to Colombo, Sri Lanka. But simply reaching land is far from the end of the conundrum.

“The shipping line has said, ‘what would you like to now do with it? Would you like to sell it within India?’ Or, you know, ‘what is your plan with it?’ And that puts us in a very difficult position,” Cabral added.

Insurers and shipping companies now see the wider Middle East region as one of heightened risk.

Shipping companies have slapped $4,000 surcharges per container destined for “the entire Middle East,” Cabral said. On dry land, trucking and logistics costs range from $4,000 to $9,000 per container to move goods onward to the UAE, Cabral added.

“I mean, we were looking at some of our containers out of Europe, and what we would normally pay is 3,000 euros (around $3,400) for on freight. The quote came in at 14,500 euros, and that’s to get it to Jeddah,” Cabral said, referring to the Saudi Red Sea city. “Then you would still need to truck it from there with even additional costs, so it is just too expensive.”

And those costs will eventually be passed on to the consumer. Cabral said Kibsons might increase prices by up to 20% on some products, such as dairy and some fresh produce. “We have about a month of inventory of fresh produce in warehouses.”

Air freight is also a vital lifeline for the region, but this has also been plagued by problems in recent weeks.

Dubai International Airport announced a total shutdown for 48 hours when Iran launched retaliatory strikes on February 28. This affected passengers and also cargo shipments.

On Monday, flights were temporarily suspended at the airport after Dubai Civil Defense reported a fire resulting from an impact of a drone attack on one of its fuel tanks.

Spinneys, another well-known retailer with roots in the region since 1924, is confident it can secure its supply chain.

“There is no way we’re going to go hungry,” said Louis Botha, head of supply chains at Spinneys, a major supermarket chain in the region.

Having weathered past conflicts and economic turmoil in markets like Lebanon and Egypt, it now faces unprecedented challenges in the Gulf. Turning to contingency plans, Spinneys is exploring trucking containers of food from the United Kingdom, through France, and finally into Turkey before heading to Iraq, Saudi Arabia, and the UAE.

“We can actually do road freight in like 12 days directly from the UK to the Jebel Ali warehouse,” Botha told CNN. “If you drive that without stopping, it’s about 72 hours.”

He says it will be 40% cheaper than air freight due to increased air cargo costs.

Rising prices on the shelves

The knock-on effect of these disruptions is not ideal for the consumer, however, who can expect to pay higher prices with less choice.

In response, Gulf Cooperation Council (GCC) governments are trying to ease these bottlenecks.

Oman and the UAE have introduced a new trade corridor, which is expected to accelerate clearance processes between ports such as Muscat and Jebel Ali.

Richard Meade, editor-in-chief of Lloyd’s List Intelligence, said insurance is available, “if you’re willing to pay enough,” but believes that is not the real problem.

“It’s the security issue that needs to be addressed,” he told CNN.

Talk of securing the strait militarily has risen in recent days, especially after US President Donald Trump tasked the US Development Finance Corporation with offering security guarantees to shipping companies, and even raised the prospect of US Navy escorts.

However, Meade is skeptical.

“US and EU naval escorts are not coming anytime soon,” he said. Even if such military support does become available, Meade believes the “priority will be for oil tankers” and not cargo vessels.

He also anticipates that the scale of such an operation would need to be vast.

“Eight to 10 destroyers will be needed to escort five to 10 tankers daily,” he said.

Before the crisis, the Strait of Hormuz would wave up to 60 tankers through its waters a day, according to Lloyd’s List Intelligence. And even if such a complex and expensive operation were to kick in and be successful, the problem of moving cargo ships laden with food and other vital goods would remain as tankers carrying oil would be prioritized.

Trump and his administration remain bullish about ending the war on their terms. But with each passing day, the consequences are spreading beyond the battlefield, threatening the flow of food, fuel and other essentials to millions across the region.

CNN’s Youmna Sukkar contributed to this report.

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