Mapping Iran’s Resource-Led Recovery

A Week of Significant Global Transition

The global market landscape has undergone a rapid transformation this week as conflict in the Persian Gulf has forced a fundamental repricing of risk across multiple sectors. The current volatility is shaped by a significant supply-chain vacuum, but it is occurring against a critical political backdrop: the approaching U.S. midterm elections. The current Trump administration faces substantial domestic pressure to curb fuel and food inflation, suggesting that every available lever will be utilized to ensure a swift resolution and return to normalcy in the region. As a result, market momentum has remained incredibly fluid. To illustrate the velocity of these moves, crude oil has retraced -12% on Tuesday related to growing speculation ending hostilities and an imminent reopening of the Strait of Hormuz.¹

As investors, during periods of peak uncertainty, the instinct is to pull back from risk assets; however, history suggests these are precisely the moments to identify structural long-term opportunities. As a reminder, the market faced similar uncertainty last year, yet those who maintained exposure on April 8th, Liberation Day, have seen the S&P 500 appreciate by +36%.² As we continue to monitor the eventual recovery of global production, it is important to review the downstream impacts of the current supply cutoff in order to understand why a positive outlook on domestic resilience remains warranted.

Energy Markets: Tactical Resilience and Consumer Pressures

The effective closure of the Strait of Hormuz has severely restricted global energy supply, as the waterway transports over 30% of the world’s crude oil and 20% of liquefied natural gas (LNG).³ Over the last week, Brent crude prices surged by 28% to a peak of $93 per barrel, a move that has directly translated to a 21% spike in U.S. gasoline prices.⁴ Markets are currently pricing in a significant geopolitical risk premium, with major integrated energy players like ExxonMobil (XOM) and Chevron (CVX) seeing year-to-date gains of 25% and 24%, respectively.⁵ Given that consumers are exposed to this shock, the current administration has made it a top priority to lower oil costs through initiatives like escorting tankers and ultimately seeking a swift end to the conflict. While President Trump has signaled a belief that prices will retreat rapidly upon the conflict’s conclusion, recovery be delayed due to halted production, decreased refinery and chemical plant run rates, storage saturation, and threats to critical infrastructure in Saudi Arabia, Qatar, and the UAE. Such results highlight the importance on keeping a pulse on the speed of regional production and refining restarts, as any delay may extend this high-margin environment.

Helium and High Tech: AI and Semi-Conductor Speed Bump

The shutdown of three helium production facilities in Qatar has removed one-third of the world’s supply from the market, sending spot prices up by 35% to 50% compared to last week.⁶ As a non-substitutable component in semiconductor manufacturing, this cutoff of helium supply has introduced a temporary setback for the global tech supply chain and AI infrastructure. While this scarcity impacted chip makers, with Taiwan Semiconductor Manufacturing Co (TSM), the world largest contract chip manufacturer, down -6% since the conflict began, we view the impact as transitory as the underlying demand for AI-grade semiconductors remains vertically integrated.⁷

Demand for semiconductor chips is exceptionally resilient due to the massive acceleration in the AI infrastructure supercycle. 2026 hyperscaler capex is set to reach $320 billion, which is a $120 billion upward revision from prior quarters. This aggressive investment is driving a 20% growth rate in broader infrastructure with backlogs and order growth remaining strong.⁸ In Q4 2025, Vertiv (VRT) reported over 252% organic order growth year-over-year with its backlog totaling $15 billion, suggesting that the momentum for AI infrastructure is durable.⁹ While input commodity spikes like helium are important to monitor, the scale of capital investment in 2026 ensures that the structural expansion of data centers will continue to support robust demand for high-end semiconductors.

Petrochemicals: The U.S. Feedstock Arbitrage

The restriction of Middle Eastern hydrocarbons and liquified natural gas has impacted the plastic manufacturing industry as domestic ethylene prices, a core industrial ingredient for flexible food product plastic, have jumped 32% to 24.5 cents a pound, while polymer-grade propylene, the core chemical for higher durability plastics, has climbed to 42 cents, the highest level in over a year.¹⁰ As supplies are temporarily low, North American operators can capitalize on low-cost domestic shale gas while their counterparts in Asia and Europe struggle with supply disruptions and margin compression. U.S. cyclical chemicals can fill the global void for the building blocks of plastics and detergents. However, it is essential to monitor global inventory levels, as if the roughly one million barrels per day of LPG currently trapped in the Persian Gulf continue to be unavailable across the globe, the pricing power for domestic producers and related plastic goods could remain elevated for an indeterminate amount of time.

Fertilizers: Positioning for Persistent Tightness

The agricultural complex is facing an intense supply squeeze, as the conflict severely constrains the global trade of nitrogen and phosphates. The Strait of Hormuz carries roughly 33% of global fertilizers, including 20% of the world’s phosphorus, 45% of urea, and 30% of ammonia.¹¹ These logistics backups have sent U.S. fertilizer equities to record levels, with CF Industries Holdings (CF) rising 43% YTD to an all-time high.¹² Beyond equity markets, this has direct and severe implications for global food prices. Fertilizer is critical for productive crop yields, accounting for 30-50% of harvested yield.¹³ If the conflict drags on, these increased input costs will reflect in higher global food prices. For investors, this represents a structural shift toward securing domestic agricultural inputs as regional producers in the Middle East face prolonged operational uncertainty.

Cautious, But Hopeful Post-Conflict Outlook

The current volatility across energy, chemicals, and fertilizers is a symptom of a localized supply shock that is currently being addressed as a primary global priority. We remain hopeful on the administration’s clear motivation to resolve the conflict and costs before the midterm elections. However, the true duration of this market cycle depends on the “pulse” of the recovery, specifically, how fast global production and logistics can return to full capacity post-conflict. By focusing on domestic industrial strength while staying alert to the logistical timeline of the Persian Gulf, investors can navigate this volatility with a focus on pro-growth objectives that exist in this environment.

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Sources:

1. Bloomberg, As of March 10, 2026 ↩︎
2. Bloomberg, As of March 10, 2026 ↩︎
3. Bloomberg Intelligence: As of June 13, 2025 ↩︎
4. Bloomberg: As of March 10, 2026 ↩︎
5. Bloomberg: as of March 10, 2026 ↩︎
6. Hannam & Partners Analyst Note: As of March 6, 2026 ↩︎
7. Bloomberg, as of March 10, 2026 ↩︎
8. Deutsche Bank Analyst Note: as of March 2, 2026 ↩︎
9. VRT Q4 2025 Earnings Call: as of February 2, 2026 ↩︎
10. Bloomberg Intelligence: as of March 6, 2026 ↩︎
11. Barclays Analyst Note: As of August 13, 2026 ↩︎
12. Bloomberg: as of March 10, 2026 ↩︎
13. Water Tower Research Analyst Note: As of January 20, 2026 ↩︎

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