Hormuz Closed. Sulfur Spiked—Here's the Pick Built for This Moment.

'Crisis Investing' Issue 5 / May 2026 – Vol 3

Fellow Crisis Investors,

It’s the little things that often get you. For want of a nail, the shoe was lost. For want of a shoe, the horse was lost — then the rider, the battle, and the kingdom. Something trivial that’s taken for granted may turn out to be critical for the whole system. When it goes, everything downstream goes with it.

That may be where we are right now with sulfur. I realize that sounds absurd. Sulfur wouldn’t seem to be a chokepoint of modern civilization.

I first encountered the element as a 9-year-old. It was one of the chemicals in my Chemcraft chemistry set. It was interesting to watch the yellow powder melt under the low flame of an alcohol-fueled burner, releasing the acrid smell of brimstone. Brimstone means “burning stone”; it’s the Biblical element that Yahweh favored for smiting wayward cities. Some say the unrighteous will boil in a lake of brimstone for eternity…

Despite its ancient credentials, most people can’t tell you where it comes from or how it’s now used. It’s produced mainly from sour natural gas processing — and as a byproduct of refining sour crude (like Venezuelan). It’s a costly nuisance for oil men that needs to be removed during refining. It’s also an unwanted byproduct from refining metal ores, which are mostly sulfides. It’s the fifth most common element on the planet. Before the ongoing Hormuz crisis, it was quite literally cheaper than dirt, often selling for around $50 a tonne.

Even though it can be a bothersome pollutant to oil and gas men, it’s valuable and essential to the world at large. It depends on where it is, and how much it costs to transport and transform into sulfuric acid — the most-produced industrial chemical on earth. Half of it is made into fertilizer. It also mines your copper (if the ore is an oxide, as opposed to a sulfide). It refines uranium, rare earths, nickel, cobalt, and reacts with lead for automotive batteries. It underwrites the entire industrial economy.

Until three months ago, about half of the world’s seaborne sulfur passed through the Strait of Hormuz, a byproduct of oil and natural gas production and refining around the Gulf. Then Washington, guided by Tel Aviv, launched what may be the most dangerous and outrageous war in recent memory — an unprovoked attack on Iran in the middle of active negotiations. It was a foolish decision Americans will spend decades trying to justify, rationalize, and pay for.

You know what happened next. Iran shut the Strait. And Trump’s threats, ultimatums, and shifting deadlines can’t pry it back open. It’s been closed for almost three months. It’s now more than just supply disruption — it’s turning into supply destruction. Refining and production infrastructure across the Gulf is being hit, and the damage to that kind of capacity isn’t measured in days or weeks. It will take months or years to return to the status quo ante. Persian Gulf sulfur exports are down roughly two-thirds. At the same time, China, by far the world’s leading sulfuric acid exporter, announced an outright ban on exports. Partially to protect its own farmers, and partially (I suspect) to intimidate other countries. Another three million tonnes of supply, gone overnight.

So now the price of sulfur itself is up almost 100%, and sulfuric acid is up roughly 160%. Every industry that depends on it is now forced to either pay whatever it costs, ration, or shut down.

This creates tension between food producers and metal producers. A little more than half of sulfuric acid goes to fertilizer. Much of the rest goes to mining. Both need it, both will get less and pay more. The decision over who gets priority will mostly be made by governments, not by markets. I know which way most governments lean.

For my part, I’ve bought the corn ETF we own in the portfolio (CORN). I’m also long rice in the futures market, because rice is a fertilizer hog. In fact, all the grains impress me as being underpriced. Shortages, and higher prices, are very likely because of the US/Israel versus Iran war.

The bottom line is that the damage is already locked in. The Strait could reopen tomorrow — it won’t but pretend it could — and the daisy chain of consequences would still play out for years. Sulfur capacity, like that of the oil and gas it comes from, doesn’t switch back on with a press release. Fertilizer not applied this spring isn’t a harvest deferred. It’s a harvest lost. Mines that idle their leach circuits don’t restart them in a week. The world spent years and tens of billions of dollars building the relevant infrastructure. Rebuilding it will take much, much longer than the war.

Yet the markets are still mostly sleepwalking. There’s a lot of apathy because people seem unable to fully grasp the situation. The shelves are still stocked, and the gas station pumps still work. The human brain is famously bad at reacting to slow-moving catastrophes.

For what it’s worth, the sulfur cascade is just one of several running in parallel. Energy lockdowns are starting to show up across Asia — four-day work weeks for state employees, jet fuel rationing, calls to cut air travel. Trucking is wobbling on six-dollar diesel. There’s a motor-oil shortage almost nobody is talking about yet, because the high-grade base stocks for modern synthetic oils mostly come from the Persian Gulf.

The supply cascades from the closed Strait will be with us for years. And I expect they’ll get worse before they get better. Trump is highly unpredictable; he could do anything now that he’s punched a giant tarbaby. However, I feel confident that the Iranians aren’t going to roll over. They’re righteously offended and expect more than a ceasefire. They’ll want reparations.

Sulfur is the element in this drama that most people aren’t watching. The cascade is already in the data — the wheat plantings, the cuts at acid-dependent mines, the empty acid storage tanks in Chile. The question isn’t whether any of this affects you; it will. The real question is whether you’ve positioned yourself to benefit while most people are getting crushed by it.

A small number of companies are going to come out the other side of this substantially richer than they went in. The one Lau walks you through this month is one of them. Details below.

Regards,

Doug Casey

Recommendation

Hi,

Lau here.

When we started building the case for this issue, the first question I asked was the obvious one: what’s the most direct way to play a sulfuric acid crisis? It turns out the obvious answers are mostly bad.

You can short the operators that need acid as an input. But their margins are still buffered by long-term contracts and pass-through clauses for the next few quarters. And shorting commodity producers in a generally bullish commodity tape is a great way to get carried out. You can chase the acid spot price directly. But no liquid ETF or futures contract gives you that exposure. Acid is too corrosive, too bulky, too regional to trade like a financial commodity.

You can try to find a pure-play sulfur producer. But pure-play sulfur miners are essentially extinct. Frasch mining (the old process of bringing elemental sulfur to the surface) shut down two decades ago. The biggest sour-gas processors that produce sulfur as a byproduct (Saudi Aramco, Qatar Energy, the Iranian oil entities) aren’t investable for U.S. retail. And the Western alternatives are integrated oil and gas plays where sulfur revenue is a footnote, not a story.

You can’t really get a clean sulfur play from the major sulfuric acid producers like Mosaic and Nutrien either. They’re actually on the wrong side of the trade. They consume sulfur to make acid in-house, then consume the acid to make phosphate fertilizer. They’re net consumers, not net producers.

That leaves the small handful of mining majors that own and operate their own integrated smelters: Freeport, Glencore, a couple of others. They do have some acid byproduct exposure. But at their scale, the acid revenue line is a footnote against the rest of their business. And none of them sit in a region where the acid market has truly seized up the way it has in the corners of the world hit hardest by the Hormuz cascade.

What you actually want is a company that produces acid as a side-product of something else profitable (ideally something you’re already bullish on independently), in one of those acid-starved regions, with structurally fixed costs that don’t move when the acid price triples. And the acid line itself has to be meaningful enough relative to the rest of the business to actually move the stock when the economics improve. Not just show up as a footnote.

That company exists. And it’s been quietly sitting at the center of one of the most important deposits of the metal that powers global electrification.

We’ll get to the name in a moment. First, a few pages on the math. Understanding why this combination is suddenly worth billions of dollars more than it was six months ago is what makes the rest of the case obvious.

If you’ve never thought hard about how modern smelters work, this is the part of the issue that’s going to change how you read every commodity headline that follows.