The Strait of Hormuz Closure Is Already Hitting Supermarket Prices

Crop prices just hit a three-year high, indicating major downstream pain soon to come at the supermarket. There are two major factors leading to high crop prices and a potential global food crisis: heat waves and intensifying conflict in the Black Sea threatening to disrupt global grain trades, and volatility in fertilizer markets stemming from the war in Iran and the closure of the Strait of Hormuz. The International Food Policy Research Institute (IFPRI) is referring to the unfolding situation in fertilizer supply chains as an “input crisis”…

Refining & Products Context

Downstream margins — or crack spreads — have experienced considerable volatility as refinery operators navigate feedstock cost fluctuations, product demand seasonality, and evolving fuel specifications. Gasoline and distillate margins serve as key profitability levers for integrated refiners.

Refinery utilization rates, particularly in the U.S. Gulf Coast and Northwest European hubs, directly influence product availability and pricing. Unplanned outages, scheduled turnarounds, and weather-related disruptions are recurring factors that tighten regional product supply.

What to Watch

Key metrics to watch include refinery utilization rates, weekly distillate inventory builds or draws, and crack spread movements, which serve as real-time indicators of refining profitability across major processing hubs.