(Author’s Note: Source data for this article is ChatGPT)
Today, we stand at the precipice of a huge mega-disaster never before seen in human history.
The global oil crisis is being triggered by the war between US-Israel and Iran, which controls the Strait of Hormuz through which 20 percent of the global oil supply passes. No one knows what the results of the war will be, when it will end, or what the global price of oil will be then.
On top of that, the Panama Canal, an alternate global oil route, also has its problems. If it is compromised, the transport cost of oil to Southeast Asia may easily double.
Here is the domino effect leading to a global food crisis: Hormuz crisis triggers fertilizer shortage, which triggers rice and food shortage, which triggers hoarding, which triggers government controls, which triggers hunger and famine, which triggers social unrest.
This does not take into account the dramatic effects of global warming (typhoons, hurricanes, ocean current aberrations affecting weather and, in turn, fish supply and agricultural outputs, and climatic aberrations due to shifts in polar conditions). This last harsh winter has churned up intense blizzards in the US, Russia, China, and Japan, and the entire northern hemisphere.
Before the crisis, some 30 to 35 percent of global seaborne fertilizer (mainly nitrogen and urea) passed through Hormuz. Nearly half of the globally traded urea originates in the Gulf and passes through Hormuz. The fertilizer supply passing through Hormuz has dramatically plummeted to zero to 10 percent as of 6 April. As a result, global fertilizer prices are rapidly spiking.
Countries with agricultural economies like India and the Philippines are highly exposed, as are Bangladesh, Pakistan, Vietnam, Kenya, Ethiopia, Nigeria, and Brazil. Food security strategies need to be planned in advance in anticipation of food supplies diving and prices skyrocketing.
China has a large domestic fertilizer production base, but exports are restricted. Russia and the US are net exporters. So the main victims are Southeast Asia and sub-Saharan Africa.
In the Philippines, the price of rice has risen three to five percent since January. Record highs are P65 to P70 per kilogram from P45 to P60/kg. If fertilizer prices spike by 50 to 100 percent, this will add eight to 15 percent to farm costs. The Philippines imports 20 to 30 percent of its rice supply. Expected increases include: for rice, 15 to 30 percent; vegetables, 20 to 40 percent; meat, 10 to 20 percent; and fish, 10 to 25 percent.
If the Hormuz disruption lasts three to six months, rice prices will rise 30 to 50 percent and other food, 20 to 35 percent. There is a high risk of government price caps, expanded subsidies, and supply shortages in some areas. Bigger increases are expected in a “second wave” mid-2026, if the disruption continues.
Never in the history of mankind has there been a need on a planet level to alleviate poverty, share with our neighbors, fend off anarchy, and strike strategies for food security and production.
Now more than ever, before the crisis gets worse, we need to initiate programs for fuel austerity, a return to the stone age of wood and rice bran fuel, and an expanded mass transport system away from Grab cars.
The Church has a special role in harnessing the faithful to work for each other, especially for the poor, and in strengthening the basic community organizations down to the barangay and sitio levels.
(Reactions to redgate77@gmail.com)