Double blow from the Middle East – aluminium supply disruptions and export challenges for the automobile industry

The ongoing geo-political conflict in West Asia has put many end-user sectors under strain in several parts of the world. From packaging to building and construction, all have been whining over raw material crisis, especially aluminium, since Gulf countries contribute a substantial portion of the metal used in these manufacturing sectors. Not only large economies like Europe, the United States, or India are grappling with crisis, but also countries like Sri Lanka, which consumes only 28,000 tonnes of aluminium in the construction sector, yet under pressure. That’s because out of 14,941 tonnes of unwrought aluminium sourced in the country, 5,235.73 tonnes come from Bahrain.

Now, coming to the automobile industry, for which the problem is more nuanced because the industry is largely dependent on aluminium and crude oil, and Gulf countries are the major suppliers of both the commodities. About 210-250 kg of aluminium and 50-100 gallons of crude oil go into the production of one passenger vehicle. Globally, about 14-17 million tonnes of aluminium is used in passenger vehicles. The calculation goes like this – according to International Organization of Motor Vehicle Manufacturers (OICA), about 50 million units of passenger vehicles were produced in the first three quarters of 2025, meaning 16 million units per quarter. So, on average, the annual output of vehicles is around 66 million units; hence, aluminium usage amounts to 13.9-16.5 million tonnes. Passenger vehicles consume about 60 per cent of total aluminium consumption in the automobile industry, hence the remaining 40 per cent, which is equivalent to 11 million tonnes is used in commercial cars.

On the other hand, if 50-100 gallons of crude oil in used in one passenger vehicle, then about 157 million barrels of crude oil is used annually for the production of 66 million units of passenger cars. Roughly 7 gallons of oil are needed just to produce the synthetic rubber and materials for one vehicle’s tires, while plastics and engine lubricants add to the overall usage.

The closure of Strait of Hormuz for the last one and a half month has chocked off roughly 12 million barrels per day of oil production – which the International Energy Agency explains the biggest disruption in the history of the global oil market. As a result, Brent crude oil price in March peaked at USD 119 per barrel. Now, it has slightly dipped to USD 98 per tonne, as of April 17, 2026.

But it is not only about inflated oil prices or aluminium supply chain disruptions, the damage runs deeper and in several layers for the automobile industry. Daniel Harrison, Senior Automotive Analyst at Ultima Media, explains: "Iran's de-facto blockade of the Strait of Hormuz hasn't just elevated energy prices or disrupted supply chains, it also cascades up the value chain to affect every type of raw material used in automotive production; steel, aluminium, plastics, rubbers, glass, semiconductors, and even the production of helium used in the production of EV batteries. "The effect? The certainty of inflationary cost pressures upon OEMs."

Still, of all the disruptions that have happened to the automobile sector over six weeks, the most structurally difficult one to unwind is the primary aluminium supply chain chaos.