PAYNE INSTITUTE COMMENTARY SERIES: COMMENTARY

By MacDonald Amoah, Jahara Matisek, and Morgan Bazilian

July 1, 2026

The United States and its allies have policies to help ensure the delivery and security of food, munitions, oil, LNG, and semiconductors. Yet no comparable strategy exists for the chemical that connects and underpins them all. Sulfur and its derivative, sulfuric acid, sit upstream of fertilizer production, critical mineral processing, and munitions manufacturing. The 2026 Iran War exposed this vulnerability and the institutional response has made it worse.

Energy officials view sulfur as a byproduct of oil and gas refining. Agriculture officials view it as a fertilizer input. Mining officials view it as a processing reagent. Defense officials encounter it only as finished products further down the supply chain in things like radars, batteries, semiconductors, and munitions. No sector sees the whole molecule, and none has the mandate to manage it.

The Fracture

Closure of the Strait of Hormuz trapped 50 percent of the world’s seaborne sulfur trade, which originates from Middle Eastern oil and gas refineries. What followed was not just a supply shock, but a demonstration of what happens when a critical input has no institutional owner during a crisis. China restricted sulfuric acid exports to protect domestic fertilizer and industrial capacity. Russia and other countries imposed their own export controls. Each government acted to defend the sector it understood best. Collectively, these decisions cascaded into a global shortfall of 5.1 million tons.

Middle East seaborne sulfur prices surged past $800 per ton on arrival in Asia. Some Western benchmarks peaked around $1,500 per ton. Even with a shaky U.S.-Iran peace deal, destroyed regional processing infrastructure and lingering export controls will keep supply bottlenecks tight and maintain a price premium for years. A return to normal global shipping will likely take months, and maybe longer.

A key complexity we explore here: three sectors began competing for a shrinking supply of the same molecule, and each sector’s defensive response compounded the damage for the other two.

The Cascade Nobody Governs

Individual analyses of sulfur’s role in agriculture, critical minerals, or defense have appeared across policy outlets since the Hormuz disruption began. Taken together, they reveal a coordination failure that no single-sector analysis can capture.

Start with food. Most elemental sulfur is converted into sulfuric acid for processing phosphate rock into diammonium phosphate (DAP), monoammonium phosphate (MAP), and nitrogen-phosphorus-potassium (NPK) fertilizers. A single ton of DAP requires roughly 0.4 tons of sulfur. Fertilizer giants like Mosaic are curbing production because sulfur costs now consume up to half their total product value. Farmers, bound by planting windows that cannot be postponed, are forced to ration fertilizer application. Agricultural economists warn this will degrade next season’s harvests and lock in grocery inflation for years. The United Nations World Food Programme estimates over 45 million people now face severe hunger partly because of this chemical disruption.

When Mosaic and other fertilizer producers cut output, they do not simply reduce fertilizer supply. They reduce a secondary source of sulfuric acid that the mining industry relies on, since phosphate processing generates acid that enters industrial supply networks. Simultaneously, the critical minerals sector is drawing from the same shrinking pool. Modern Indonesian high-pressure acid leaching (HPAL) facilities need 10 tons of sulfuric acid to produce a single ton of nickel. The surge past $800 per ton radically undermines project economics for the copper and nickel operations that G7 mineral strategies treat as cornerstones of energy transition and supply chain security. Western mineral strategies, as CSIS has noted, list priority metals while completely ignoring the reagents required to process them.

Every ton of nickel or copper not produced because sulfuric acid is too expensive or unavailable is a ton unavailable to the defense industrial base. Sulfuric acid dissolves the copper for electrical systems, enables the superalloys required for drone production, and provides the ultra-high-purity inputs needed for semiconductor wafer etching. A lack of concentrated sulfuric acid caps the production of nitrocellulose propellants required for artillery and small arms. Because sulfur is a byproduct of hydrocarbon refining, its supply is governed by energy market economics, not by the urgency of the sectors that consume it. This is the byproduct trap that makes the prelogistical dimension of sulfur so dangerous.

The result is a three-way competition that the free market is singularly unequipped to adjudicate. Wealthy industrial buyers and high-margin mining operations can outbid fertilizer producers in developing countries, which in turn deepens the food insecurity and political instability that generate the very security crises defense planners are trying to prepare for. Agriculture’s loss becomes a recruiting tool for the conflicts the military is then asked to fight.

Why Institutions Cannot See the Whole Problem

Sulfur’s peculiar status as a byproduct ensures that it never appears as a primary concern on any single institution’s balance sheet. The Department of Energy tracks it as a derivative of hydrocarbon processing. The Department of Agriculture encounters it as a fertilizer cost input. The Department of Defense sees it only once it has already been transformed into copper cathodes, semiconductor wafers, or propellant chemicals several stages downstream. The Geological Survey publishes production data. No agency synthesizes the competing demands, maps the cross-sector trade-offs, or exercises the authority to prioritize allocation during a shortage.

The same fragmentation repeats at the international level. The G7 critical minerals agenda focuses on mining and refining. The FAO monitors food prices and fertilizer availability. NATO tracks munitions stockpiles. Each organization operates within a mandate that captures sulfur’s effects in one domain while remaining blind to the others. When China banned sulfuric acid exports, it protected Chinese agriculture at the expense of Indonesian nickel processing, which in turn constrained the battery supply chain that Western defense and energy transition strategies both depend on.

When something belongs to everyone’s supply chain and no one’s strategy, the default posture is neglect.

A Sulfur Strategy Built for the Coordination Problem

The familiar policy responses to commodity disruptions: stockpile more, monitor better, diversify supply. Each is necessary but insufficient when the underlying problem is institutional fragmentation. A sulfur strategy must be designed specifically to solve the coordination failure that defines this crisis. We highlight five response options. 

First, establish cross-sector visibility. The United States and its allies should jointly build a sulfur and sulfuric acid monitoring system that tracks competing demands in real time, not just supply volumes. This means integrating sulfur flow data with phosphate fertilizer production schedules, HPAL facility acid consumption, defense industrial base reagent inventories, crop calendar deadlines, and export control movements across jurisdictions.

Second, assign institutional ownership. No existing U.S. agency has the mandate to manage sulfur across its competing uses. This gap must be closed. Whether through executive order, interagency task force, or legislative designation, one entity must hold the authority to synthesize competing sectoral demands, identify emerging bottlenecks, and recommend allocation priorities before a crisis forces improvisation. The Department of Commerce’s Bureau of Industry and Security or a reconstituted critical materials office within the National Security Council are plausible candidates, but the institutional design matters less than the principle: someone must own the whole molecule.

Third, create strategic reserves designed for cross-sector allocation. Strategic sulfur reserves are logistically feasible, as elemental sulfur is stable and relatively safe to store, but they must be paired with pre-established allocation frameworks. The allocation framework must address the hardest trade-off directly: when fertilizer access for vulnerable regions requires protection versus when defense supply chains demand absolute priority, and how to prevent wealthy industrial buyers from collapsing fragile food systems in the process.

Fourth, break the byproduct trap through targeted investment. Sulfur’s dependence on hydrocarbon production is the structural root of the coordination failure, because supply cannot respond to demand from any sector. Governments must fund acid recycling at scale, alternative non-sulfuric leaching technologies for mineral processing, and fertilizer formulations that reduce sulfur intensity.

Fifth, formalize allied sulfur diplomacy. Long-term offtake agreements with allied sulfur producers should be structured to serve the coordination function, not just the supply function. This means contracts that include allocation flexibility during emergencies, shared logistics infrastructure (melting facilities, rail access, port capacity), and mutual commitments to refrain from the kind of export controls that turned the 2026 disruption from a shortage into a cascade.

Conclusion

The sulfur crisis of 2026 will be remembered for what it revealed about how modern economies and militaries are governed. A molecule that enables food production, mineral processing, and weapons manufacturing simultaneously had no institutional owner, no coordination mechanism, and no strategic plan.

ABOUT THE AUTHORS

Macdonald Amoah
Macdonald is an independent researcher with interests across critical mineral supply chains, advanced manufacturing gaps, the defense industrial base, and the geopolitical risks of the mining sector.

Jahara Matisek
Senior Research Fellow, Payne Institute and Command Center Director (Joint Operations Center), U.S. Northern Command​

Jahara “FRANKY” Matisek (PhD) is a U.S. Air Force Senior Pilot serving at U.S. Northern Command that is a Fellow at the U.S. Naval War College and Fellow at the Payne Institute for Public Policy. He was previously a professor at the U.S. Air Force Academy and the Naval War College. He has published 2 books and over 130 articles on strategy, warfare, and critical minerals for national security. He has over 3,700 hours of flight time in the C-17, E-11 BACN, T-6, and T-53 and earned a Bronze Star for commanding and directing Kandahar Airfield operations in Afghanistan. As an innovative strategist he has been a Fellow at: AFWERX, Homeland Defense Institute, European Resilience Initiative Center, Irregular Warfare Initiative, Modern War Institute, and William & Mary. Finally, he is a Visiting Scholar at Northwestern University and has been Co-PI on two Department of Defense Minerva grants and a Defense Security Cooperation University research program, being awarded over $1.2 million in research funding. 

Morgan Bazilian
Director, Payne Institute and Professor of Public Policy, Colorado School of Mines

Morgan Bazilian is the Director of the Payne Institute and a Professor of public policy at the Colorado School of Mines. Previously, he wD.as lead energy specialist at the World Bank. He has over two decades of experience in the energy sector and is regarded as a leading expert in international affairs, policy and investment. He is a Member of the Council on Foreign Relations.

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