Sulphuric acid: the underestimated geopolitical risk
What do our food security and the energy transition have in common?
Both depend on a critical commodity that is transported in large quantities through the Strait of Hormuz. However, this is not oil – but sulphur or sulphuric acid.
What sounds like a niche topic is increasingly becoming a strategic risk for industry and security of supply. Sulphuric acid is the basis of numerous processes without which modern high technology would not function.
The global bottleneck is thus increasingly shifting:
away from ore,
towards chemicals.
No energy transition without sulphuric acid
Around 70 percent of global sulphuric acid consumption is accounted for by two key industries: fertilizer production and metal processing.
A potential shortage therefore affects two central pillars of modern states: Food security and industrial transformation.
Metals such as copper, nickel and rare earths are needed for wind turbines, power grids, hydrogen infrastructure and battery storage. However, commodities such as neodymium oxide must first be chemically extracted from the rock and separated. As high-purity deposits are becoming increasingly depleted, the importance of such chemical processes continues to grow.
The situation is particularly critical for rare earths, such as terbium oxide:
Without sulphuric acid, many elements can hardly be processed or separated economically. The focus is therefore increasingly shifting from pure ore mining to the entire chemical processing chain.
The Strait of Hormuz makes sulphur strategic
Sulphur is primarily a by-product of oil and gas production. This makes the Gulf region a geopolitical bottleneck for the global market. In peacetime, around half of global sulphur exports by sea come from this region.
If the Strait of Hormuz comes under pressure, this will not only affect oil and gas – but also the global chemical and metal industries.
The market is already tense anyway:
Indonesia’s booming nickel industry consumes enormous quantities of sulphuric acid, while Russian exports are declining as a result of the war in Ukraine.
Alternative producers such as the USA or Canada can hardly close this gap in the short term. It would hardly make economic sense to expand oil and gas production solely for the sake of sulphur production. It would also take years to build up new capacities.
As a result, the first countries are already starting to protect their markets. Turkey has imposed an export ban on sulphur, while India and China are considering similar measures.
The market is already reacting clearly
The geopolitical tensions have long since had an impact on prices.
The price of sulphur has risen massively within a short space of time – a clear sign of how sensitive global supply chains have become.
This increases the risk for Europe considerably. While China has large chemical capacities of its own, the West remains dependent on global trade routes and imports for numerous primary products.
China is increasingly using this position strategically. Export restrictions no longer only affect metals themselves, but increasingly also preliminary products and chemicals that are necessary for their processing.
The new bottleneck lies in chemistry
For a long time, the debate focused primarily on mines and raw material deposits. But the real power lies deeper in the supply chain: in refining, separation and chemistry.
Those who control sulphuric acid also indirectly control parts of metal processing – from nickel and copper to rare earths such as dysprosium oxide.
Europe’s problem is not just a lack of expertise. The increasing dependence on global supply chains is also becoming critical when it comes to strategic primary products.