Hormuz Closure and US-Iran Conflict Threaten Global Supply Chains and AI Infrastructure

The ongoing conflict between the United States and Iran has led to the widespread closure of the Strait of Hormuz, creating a severe bottleneck for global energy and commodity flows. With approximately 20% of the world's oil passing through this critical waterway, the disruption is fueling a surge in crude prices and increasing operational costs for the aviation sector. Beyond energy, the geopolitical crisis is impacting specialized industrial gases and minerals. Qatar, which provides over 30% of the global helium supply, has seen its exports cut off. Because liquid helium degrades during longer transit routes, the inability to use the Strait is significantly reducing available volumes. This shortage poses a direct threat to the artificial intelligence build-out, as helium is essential for cooling the processes used to manufacture advanced graphics processing units (GPUs). While Taiwan Semiconductor Manufacturing (TSM) currently maintains reserves, these are estimated to last only a few more months. The crisis extends to the agricultural and pharmaceutical sectors, with roughly 50% of the world's sulfur passing through the Strait. Disruptions in sulfur supply are expected to drive up costs for fertilizers and medicines, adding further inflationary pressure to consumers already burdened by tariffs. Market volatility remains high as investors react to shifting headlines. While the risk of a recession increases if hostilities persist into the summer, financial advisors suggest maintaining core diversified positions, such as S&P 500 tracking ETFs, and utilizing dollar-cost averaging to navigate the instability.