The strait of Hormuz blockade will strangle US defense industry

The closure of the strait of Hormuz is causing a “paralyzing, real-time problem” for any prospective manufacturing surge in the US defense industrial base, and even for the repair of defense equipment damaged by Iranian attacks, according to analysis published by West Point’s Modern War Institute.

In particular sulphur, a vital upstream input in the extraction of critical minerals including copper and cobalt, has seen a “near total” disruption of seaborne trade in the straits, which makes up half the world’s total shipments, and prices have spiked nearly 25% since the war began, and seen a 165% rise year on year, the report said.

According to the analysis, these minerals – used in everything from microprocessors to jet engines to drone batteries – “dictate how fast things can be built and scaled under the pressure of an ongoing war”, and the effects of a sudden supply shock on US defense readiness have never been modeled.

One of the authors of that analysis, USAF lieutenant colonel and nonresident fellow at the US Naval War College Jahara “Franky” Matisek, told the Guardian in a telephone conversation that its “a cascading issue” raising the possibility that a “knock-on effect of this war is that it may cost double or more than double to replace all these weapons because all the mineral demand is going to go way up”.

Matisek warned of another possibility: “Markets are not going to be able to provide the amount of minerals that are needed to replace all these radars that have been destroyed and all these munitions that have to be replaced. It’s a really precarious spot to be in right now.”

The sulphur used as an industrial and agricultural inputs is mostly created as a byproduct of refining crude oil. The Middle East produces some 24% of the world’s supply, and around half of the world’s seaborne trade in the substance passes through the strait of Hormuz.

Sulphur is an input in the manufacture of artificial fertilizers, and international organizations, industry bodies and media reports have drawn attention to the possible downstream effects on agriculture and food supplies, especially in low-income countries whose farmers need to buy in the same markets as their counterparts in wealthy countries.

But sulphur is also burned to make sulphuric acid – the world’s most produced industrial chemical – which is used to extract copper and cobalt from low-grade ores.

And these very metals, the Modern War Institute warns, are crucial for replenishing and repairing US military equipment being used or damaged in the current war in the Middle East, pointing out that “copper is a designated strategic material embedded in the transformers, motors, and communications hardware that enable bases to operate and defense factories to function”.

The authors offer specific estimates for materials damaged in the early days of the war, writing that “it will take over thirty thousand kilograms of copper just to replace the two major US radars destroyed in Bahrain and Qatar” and “thousands of kilograms of additional copper to fix or replace other damaged US communication equipment, sensors, and radars in Jordan, Kuwait, Saudi Arabia, and the UAE”.

They add: “The current sulfur shock is becoming a copper problem, and that copper problem risks quickly becoming a readiness and resilience problem.”

They call this a “prelogistical crisis” that previous “military planning treated as background noise”.

According to a separate February analysis, also co-written by Matisek, only 6% of US defense contractors have fully transparent supply chains. In the newer report, he and his co-authors write that this has now resulted in a military effort constrained by “upstream conditions it cannot control and a US joint force discovering that its combat endurance is capped by the invisible industrial foundations needed to replenish it”.

Matisek told the Guardian that this had arisen partly from the dependence on large defense contractors, and the opacity of their supply chains to military planners.

“All the big prime defense industrial base companies, this is all proprietary information. They don’t want anyone knowing how many minerals they’re buying to make a missile,” he said.

“From a strategic sort or great power competition perspective, we can’t actually allow them to do that any more because we actually need to know this,” Matisek added.

“We don’t know who their vendors are,” he said, adding that beyond a few steps in long chains of subcontractors, “nobody actually knows who’s providing these metals, these minerals, the parts. And it just becomes a maze.”

He added that apart from copper, sulphur is a key ingredient in the explosives that are at the business end of US military activity.

“There’s only two companies that make energetics and make the high explosives. If they have not gotten any orders or requests to increase their production, that is highly problematic, especially as we get to the sulphur crunch here”.

He added: “But [there is] just sort of like a crunch for all these minerals that you need to actually spin up to make all this stuff.”

The Guardian reached out to the US Department of Defense for comment.