The Iran War Just Got Worse | The Economic Crisis No One Is Talking About
Summary
Kelvin Learns Investing presents a comprehensive analysis of the economic fallout from the 2026 Iran war, covering oil supply disruptions, fertilizer shortages, and Singapore-specific impacts. The vast majority of claims are well-sourced and accurate: the Kharg Island strike, IEA reserve release, Qatar LNG halt, 1973 oil embargo details, and Singapore's food/energy dependencies all check out against credible sources. The video slightly overstates the Strait of Hormuz's share of global urea exports (says 30%, actual figure is closer to 35-49%) and presents Singapore's electricity dependency on natural gas as 95% when official figures say "over 90%." The 47% Qatar LNG figure for Singapore applies to LNG imports specifically, not total gas supply. The Oxford Economics scenario analysis is faithfully represented. Overall, this is a well-researched piece with minor imprecisions that don't undermine the core narrative.
Claims Analyzed (15)
Source Quality
The video explicitly names its institutional sources: Oxford Economics, MSCI, the IMF, the Fed, JP Morgan, and Morgan Stanley. These are all legitimate, high-quality analytical sources. The creator clearly went through published scenario analyses and data. The Singapore-specific statistics (hawker food prices, core inflation, energy dependency) align with official government data from SingStat, MAS, and EMA. The fertilizer supply chain analysis references IMF elasticity research. Overall, the sourcing is unusually strong for a YouTube video, with almost every major claim traceable to a credible institutional source.
Transcript
The Hidden Economic Casualty of the Iran War
As the 2026 Iran conflict escalates beyond a straightforward military confrontation, Singaporean finance YouTuber Kelvin Learns Investing argues that the war's most dangerous economic impact isn't the oil shock everyone is watching — it's the fertilizer crisis that almost no one is talking about.
The Oil Shock: What We Already Know
The conflict's impact on oil markets has been dramatic and well-documented. On March 13, 2026, the US struck Kharg Island, the terminal handling 90% of Iran's crude exports. Iran's crude exports had already fallen 50% since the war began, squeezing a government that depends on oil for 25-40% of its budget.
The conflict has spread well beyond a bilateral US-Iran confrontation. Iran has retaliated against at least 11 countries, hitting the UAE's largest refinery, striking Saudi Aramco for the second time, and setting fire to Bahrain's refinery — forcing the country to declare force majeure on oil shipments. Behind the scenes, Russia is reportedly providing intelligence to Iran, while China has stationed a surveillance vessel near the Gulf of Oman to monitor US naval operations.
Oil currently sits at approximately $103 per barrel. In response, the IEA has released 400 million barrels from strategic reserves — the largest coordinated release in the agency's 50-year history — but this covers only about 26 days of Hormuz supply disruption.
Oxford Economics: Three Scenarios, One Breaking Point
The video walks through Oxford Economics' three-tier scenario analysis. In the moderate scenario ($100/barrel), the world avoids recession. In the severe scenario ($140/barrel sustained for two months), the Eurozone, UK, and Japan enter recession, the US economy grinds to near-standstill, and global CPI inflation spikes to 5.8%. In the prolonged scenario, where IEA reserves run dry and oil remains above $120, governments would begin fuel rationing — echoing the 1973 oil embargo when Americans queued in five-mile lines and gas stations deployed armed guards.
JP Morgan believes inflation, not recession, is the most likely outcome. But Morgan Stanley warns the damage has a lag: real consumption typically declines 2-3 months after an oil shock and stays depressed for 5-6 months. The Fed, meanwhile, is trapped — unable to cut rates with inflation rising, unable to raise them with the economy weakening.
The Fertilizer Crisis Nobody Is Watching
This is where the video's analysis becomes most distinctive. When Qatar halted LNG production after Iranian drone attacks, it removed 20% of the world's LNG supply from the market. Natural gas prices surged over 50%. But the downstream consequences extend far beyond heating bills and electricity costs.
Natural gas is the essential feedstock for producing urea — the dominant nitrogen fertilizer that accounts for roughly 59% of all global fertilizer use. Around 30% of the world's urea exports transit the Strait of Hormuz. With that chokepoint disrupted, fertilizer prices have spiked: urea is up 77% since December.
Using the IMF's established elasticity — every 1% increase in fertilizer prices pushes food prices up by 0.45% — the video calculates a potential 35% increase in food commodity prices already baked in. And crucially, this is happening during the March-to-May planting season. Even if the war ended tomorrow, the crop damage would be locked in for the year.
The historical parallel is ominous. In 2022, fertilizer disruptions from the Russia-Ukraine war pushed millions into poverty and sent global food prices to decade highs. Countries responded by banning food exports — India banned wheat, Indonesia banned palm oil — creating a vicious cycle of hoarding and price spikes. The current Hormuz disruption affects an even larger share of the global supply chain.
Singapore: Uniquely Exposed
The video zeroes in on Singapore's particular vulnerabilities. The city-state generates over 90% of its electricity from imported natural gas, with roughly 47% of its LNG imports coming from Qatar. While pipeline gas from Indonesia and Malaysia (about half of total supply) remains unaffected, and the government has stockpiles and gas-to-diesel switching capability, none of these measures address the price problem.
Singapore imports over 90% of its food, making it directly exposed to global food price shocks. Drawing on the 2022 precedent, when hawker food prices rose 5.7% and then 6.1%, pushing a plate of chicken rice from S$3.45 to S$4.15, the video projects that a similar pattern could send chicken rice toward S$5 per plate. Singapore's core inflation hit 4-5% during the 2022-2023 Ukraine spillover, translating to roughly S$2,000-2,400 in additional annual household costs for a family spending S$4,000 per month.
A Measured Conclusion
Despite the alarming data, the video maintains a measured tone. It acknowledges Singapore's government contingency measures (U-Save rebates, CDC vouchers, power plant fuel-switching), while noting these are band-aids on a structural problem. The closing advice is practical rather than alarmist: build an emergency fund, review expenses, and stay informed — not because the worst case is guaranteed, but because the fertilizer timeline means grocery bills won't normalize this year regardless of how the war ends.
Show raw transcript with timestamps
The Iran war is about to make your cai fan more expensive. And it has nothing to do with oil. So a few days ago I made a video when oil hit $115. Since then, the US bombed the island that handles 90% of Iran's oil exports. Qatar's entire LNG production went offline. And Iran's new Supreme Leader hasn't been seen or heard from since taking power. The question is no longer what happens when oil spikes. It's what happens if this war drags on for months. I went through every major institutional forecast I could find. Oxford Economics, MSCI, the IMF, the Fed. And the picture they're painting is pretty scary. So on March 13th, the US struck Kharg Island. This is the island that handles 90% of Iran's crude exports. Now even before this strike, Iran's crude exports were already down by 50% since the war started. Oil revenue makes up 25 to 40 percent of Iran's entire government budget. And with Kharg being hit on top of that, they are now financially cornered. And this isn't just a US and Israel versus Iran conflict anymore. Iran has retaliated against at least 11 countries. UAE's largest refinery got hit. Saudi Aramco was struck for the second time, and Bahrain declared force majeure after their refinery was set on fire, meaning they literally cannot ship oil anymore.
Meanwhile behind the scenes, Russia is feeding intelligence to Iran. And while China isn't directly involved in this conflict, they've positioned an intelligence vessel near the Gulf of Oman to track US naval movements, essentially treating this war as a live training exercise to study how America fights. So where does that leave us today? Oil is currently sitting at about $103 per barrel. In response, the IEA has released 400 million barrels from strategic reserves to try to stabilize prices, the largest coordinated release ever. But even so, that only covers roughly 26 days of Hormuz supply disruption. So while it buys time, it doesn't actually fix anything. Neither side is backing down either. Trump has demanded Iran to unconditionally surrender. But Iran has said they are not seeking a ceasefire. And with both sides talking like siao lang, it doesn't look like this war is going to end anytime soon.
The Oxford Economics published a scenario analysis with three tiers. In the moderate scenario, oil stays around $100 per barrel. That's still manageable, and we won't land into recession. However, in the severe scenario, if oil hits $140 and stays there for two months. That's where things start to break. The Eurozone, the UK, and Japan will all enter into a recession. The US economy would grind to a near standstill, and the world CPI inflation would spike to 5.8%. And then there's the prolonged scenario. If Hormuz stays closed long enough for the IEA's strategic reserves to run out, oil would stay above $120. At that point, governments would have to start rationing fuel. The last time this happened during the 1973 oil embargo, Americans could only buy gas on certain days based on their license plate number. Gas stations had armed guards, and people had to wait in five-mile lines just to fill up. Now the good news is, most banks don't think we'll hit the severe scenario. According to JP Morgan, they believe that "inflation, and not recession, is the most likely outcome." But even in that case, Morgan Stanley warns the pain could be delayed. Real consumption typically declines two to three months after an oil shock and stays depressed for another five to six months.
And here's what makes it worse. The Fed is now trapped. They can't cut rates because inflation is rising, and they can't raise rates because the economy is weakening. So for now, we're on our own. But MSCI pointed out something even more important. Since 2006, geopolitical shocks have typically caused losses that faded within a month. But when conflict triggers a sustained supply disruption, like the Russia-Ukraine war, the damage would spread to stocks, bonds, and currencies, while keeping inflation high long enough to drag down the entire economy. And that's exactly what's happening now. Except that the disruption isn't coming from just oil. It's also coming from something most people aren't even watching. Fertilizer. When Qatar halted LNG production, that took 20% of the world's LNG supply offline. Since then, the price of natural gas has surged by over 50%. And here's why that matters. Natural gas is the raw material used to make urea, aka nitrogen fertilizer, which accounts for 59% of all global fertilizer use, and nearly half of that goes straight into the grains and cereals we eat every day.
Without gas, most of the world's fertilizer production grinds to a halt. And that's exactly what's at risk, because around 30% of the world's urea exports pass through the Strait of Hormuz. If that supply gets cut off, food prices would go up everywhere. According to the IMF, every 1% increase in fertilizer prices pushes food prices up by 0.45%. Urea is already up 77% since December. So if you do the math, that's already a 35% increase in food commodity prices. And what makes this even more dangerous is timing. Planting season is happening right now, from March through May. Farmers need fertilizer today, so even if the war ends tomorrow, it would be too late, as the crop damage is already locked in for the year. But it gets worse. When food prices spike, countries panic. They start banning food exports to protect their own supply. India did it with wheat in 2022. Indonesia did it with palm oil. And when countries start hoarding, it makes the shortage worse for everyone else.
In fact, we saw this exact pattern play out in 2022. When fertilizer disruptions happened due to the Russia-Ukraine war, it pushed millions of people into poverty and hunger. Global food prices hit decade highs. And the current disruption through Hormuz? It is even bigger than back then. Singapore is uniquely exposed to this crisis. We generate 95% of our electricity from imported natural gas. And 47% of our LNG comes from Qatar. Which, as mentioned earlier, has halted production. On top of that, our piped gas agreements with Indonesia and Malaysia are set to expire by 2027 to 2028. Now to be fair, the government has said we're not completely exposed. About half of our gas still comes through pipelines from the region, and that's unaffected. We also import LNG from the US and Australia, not just the Middle East. And the government has set up fuel stockpiles and made sure our power plants can switch from gas to diesel in an emergency.
But here's the thing, none of that fixes the price problem. Even if supply holds, costs are still going up. And then there's food. Singapore imports over 90% of its food. So when global food prices go up, we feel it directly. And the best way to see that is through chicken rice. In 2022, when the Ukraine war first hit, hawker food prices jumped 5.7%. The following year, they jumped another 6.1%. During that 2 years, a plate of chicken rice went from S$3.45 to S$4.15. So if the same pattern plays out again, we're looking at close to S$5 of chicken rice per plate. Ho seh bo. Meanwhile, petrol prices have jumped about 20% in just two weeks since the war started. And analysts are saying we could see another 15 to 20% on top of that. So, how would all this affect you? Back in 2022 to 2023, Singapore's core inflation hit 4 to 5%. So let's say your household spends about S$4,000 per month. At 4 to 5 percent inflation, you'd be paying S$160 to S$200 more every single month just to maintain the same lifestyle.
And that was just the spillover from the Ukraine war. The current disruption through Hormuz affects more of our supply chain than Ukraine ever did. Now of course, the government is always ready to step in if things get worse. For example, back then, they expanded U-Save rebates for HDB households and enhanced CDC vouchers. But let's be honest. That's just a band-aid on a structural problem. If Hormuz stays closed, no voucher program would be able to fix a 47% gas supply gap. In short, nobody knows how long this lasts. Some say weeks. Some say months. But the fertilizer problem means that even if this war ends tomorrow, your grocery bill isn't coming back down this year.