Bahrain’s Alba, one of the world’s largest aluminum smelters, has declared force majeure on deliveries and cut output by 19%, citing its inability to ship through the Strait of Hormuz. Qatar’s Qatalum halted production entirely after Iranian strikes on Gulf energy infrastructure forced QatarEnergy to stop gas output on March 2.
Toyota has cut production of vehicles that rely on Gulf aluminum supplies by almost 40,000 units over two months. Nissan has trimmed its schedules.
Gulf smelters that supply Toyota, Nissan, BMW, parts makers for Mercedes-Benz, South Korea’s Hyundai Mobis and hundreds of other automotive customers worldwide are defaulting on contracts or closing down. The U.S.-Iran war has effectively shut the Strait of Hormuz to commercial shipping, cutting off one of the largest flows of automotive-grade aluminum.
The United Arab Emirates, Bahrain, and Qatar spent decades building an aluminum industry geared to the automotive sector as part of their longtime push to diversity their oil-dependent economies, turning the UAE into the fifth-largest aluminum producer on Earth. Smelters are now trucking metal to ports outside the Strait, but the makeshift routes are slower and more expensive.
The aluminum that gives electric vehicles their range is now stuck behind the same choke point as the oil they were built to replace.
“This crisis is likely to permanently change how auto and EV manufacturers assess the Gulf as a sourcing region,” Carsten Menke, head of next-generation research at Swiss investment bank Julius Baer, told Rest of World. “Not by eliminating Gulf sourcing, but by forcing OEMs [original equipment manufacturers] to rethink risk exposure, diversification, and supply-chain resilience.”
Japanese automakers, including Toyota and Nissan, source about 70% of their processed aluminum from the Middle East.
“If this situation prolongs, needless to say, there’s going to be procurement problems,” Toyota CEO Koji Sato said at a recent press conference for the Japan Automobile Manufacturers Association.
This crisis is likely to change how auto and EV manufacturers assess the Gulf as a sourcing region.”
Much of the metal is specialized, made with solar power, certified as low-carbon, and built into green supply chains that help carmakers meet emissions rules, meaning they cannot simply swap it for any grade off the market.
Benchmark aluminum prices on the London Metal Exchange topped $3,544 a metric ton, a four-year high. Fitch Group’s BMI research unit has warned they could reach $3,700 if the situation continues.
The Gulf produces about 9% of the world’s aluminum, a share that looms larger for EV makers, since an EV contains about 40% more aluminum than a gas or diesel-powered car, according to commodities researcher CRU Group.
Gulf aluminum goes into body frames, battery housings, and heat management systems across the vehicle simultaneously, meaning a single interruption affects several parts of the same vehicle.
“Disruption has a compounding effect where a single upstream constraint can ripple across several vehicle subsystems rather than being isolated to a single part or tier,” Tony Pelli, practice director of supply chain security and resilience at BSI Consulting, told Rest of World.
Emirates Global Aluminium, the UAE’s largest industrial company outside oil and gas, sells 84% of its output as a premium product tested to meet the strict standards car factories require. Qualifying a new source means months of recertification before a single shipment can enter a plant.
EGA markets this product as CelestiAL, smelted using energy from a Dubai solar park and certified as low-carbon. BMW and Mercedes-Benz supplier Hammerer Aluminium Industries, Italian brake maker Brembo, and South Korea’s Hyundai Mobis all buy it because its environmental profile helps them meet European regulatory requirements. Hyundai Mobis signed a deal in 2025 for as many as 15,000 tons a year.
“Securing short-term supplies from another producer will require some extra effort,” Menke said. “And will likely also come at a higher cost.”
While there is enough aluminum in the world to keep car factories running, the problem is getting the right grade to the right place fast enough to avoid stoppages. Battery and parts makers that buy aluminum indirectly are already reassessing contracts and discussing whether to redesign components using different materials, Pelli said.
The squeeze reaches beyond aluminum. Sulfur, an essential element in EV batteries, flows through Hormuz and those shipments have also stalled.
“Tensions in the Middle East have tightened supply of sulphur, a key feedstock used in refining battery materials,” David Leah, a senior analyst at CRU, told Rest of World. “This could eventually push up battery costs and, in turn, the price of an EV.”
Gulf aluminum factories held about three to four weeks’ worth of raw materials when the war began on February 28, after the U.S. and Israel began bombing Iran. Analysts estimate those stockpiles are now likely exhausted or close to it. Factories have stayed open by scrambling for alternatives.
Gulf smelters are trucking raw materials in and finished product out through ports that sit outside the Strait, Menke said. Sohar in Oman and Jeddah in Saudi Arabia are both being used. Fujairah in the UAE is reachable by rail from Abu Dhabi and Jebel Ali, although it remains unclear whether the right wagons for importing alumina are available.
“It appears that Middle Eastern producers might be carrying larger inventories due to their reliance on overseas imports,” Menke said. “And potentially also due to the tensions that have been building in the Middle East in the recent past.”
Resilience needs to be designed end-to-end from the start.”
About 170 container ships were trapped inside the Persian Gulf or waiting near its entrance in the first days of the conflict after Iran’s military warned all vessels away, according to Hua Joo Tan, co-founder of shipping tracker Linerlytica.
Every major shipping line has pulled its vessels, with rerouting around the southern tip of Africa adding up to 49 days to delivery times compared to typical transit times of two to three weeks. European luxury cars destined for Gulf buyers are now sitting in storage on the East Coast of Africa, according to automotive analyst Matthias Schmidt.
The Gulf had positioned itself as an efficient export bridge linking Asian smelting capacity with European and African manufacturing, Pelli said. The war has revealed the fragility of that bridge. The trucking workarounds to Sohar and Jeddah are keeping some metal moving, but they cannot replace the volume and efficiency of the sea route.
“As with many other industries, EV supply chains were optimized for speed and cost under stable geopolitical assumptions,” Pelli said. “What’s emerging now is recognition that resilience needs to be designed end-to-end from the start … rather than treated as a downstream logistics problem.”
The war is making EVs harder to build and more expensive to produce. Yet, it may also be making battery-operated vehicles easier to sell.
“Higher oil prices also push up pump prices,” Leah said. “Which could improve the relative total cost of ownership of an electric vehicle compared with a traditional combustion engine car, making electric vehicles more attractive.”
