Iran War Threatens Higher Food Prices as Agricultural Supply Chains Strain

The narrow waterway at the mouth of the Persian Gulf carries oil, gas, and a commodity that rarely makes headlines until it vanishes: fertilizer. Now, two weeks into a U.S.-Israeli military campaign against Iran, the de facto closure of the Strait of Hormuz is threatening to turn a geopolitical crisis into a global food crisis — one that could hit grocery aisles in the United States and trigger hunger emergencies across the developing world.

A Chokepoint for the World's Food System

The Strait of Hormuz is one of the most strategically important waterways on Earth. It handles roughly 27% of global oil exports, 20% of liquefied natural gas shipments, and — critically for food security — between 20% and 35% of global fertilizer exports, including 35% of all traded urea [1][6]. Qatar, Saudi Arabia, Oman, and Iran together supply a substantial share of the world's nitrogen fertilizers, and virtually all of it transits Hormuz.

When the United States and Israel launched "Operation Epic Fury" on February 28, 2026, commercial traffic through the strait was almost immediately disrupted [6]. Iran retaliated with attacks against targets across the Gulf, including in Qatar, the UAE, Kuwait, Bahrain, and Saudi Arabia [3]. Maritime insurers began canceling war risk coverage for ships in the region, and the U.S. Navy declined near-daily escort requests from commercial operators [6]. The result: a near-complete shutdown of one of the world's most important trade arteries.

"This isn't just an oil story," wrote Bram Govaerts and Sharon Burke in Project Syndicate. "The narrow waterway serves as a critical lifeline for the world's food system — transporting nearly a third of all nitrogen fertilizer and almost half of the sulfur needed for crop production" [4].

Fertilizer Prices Explode

The market response has been swift and dramatic. Global urea prices jumped 26% in a single week, from $465.50 to $585 per metric ton by March 11 [6]. At the New Orleans import hub — a bellwether for U.S. agricultural markets — urea prices surged 32%, from $516 per metric ton on February 27 to $683 on March 5 [6]. One advisory firm tracked an even steeper climb, reporting that urea prices jumped 77% from mid-December 2025 to March 9, 2026 [6].

Source: FRED / U.S. Energy Information Administration

Data as of Mar 11, 2026CSV

The countries directly affected by the conflict account for roughly 49% of global urea exports and about 30% of ammonia exports [1]. Middle East ammonia prices are up 92% year-over-year, while Middle East urea prices have risen 70% [1]. In the United States, ammonia prices are 41% higher than in March 2025, and urea prices have climbed 21% [1].

The phosphate market faces its own disruption. Saudi Arabia and Israel account for 17% of global phosphate exports, and 45% of global sulfur trade — critical for phosphate production — has been disrupted [6].

The Worst Possible Timing for American Farmers

The closure has arrived at the worst possible moment for U.S. agriculture. Spring planting season is underway across the Northern Hemisphere, and fertilizers must be applied early in the crop cycle to determine yields later in the year [1]. Approximately 25% of American farmers had not yet purchased fertilizer for the planting season when the war began [1].

The math is punishing. In December, one ton of urea cost the equivalent of 75 bushels of corn. By March, the same ton cost 126 bushels [6]. Illinois corn producers are expected to spend about $229 per acre on fertilizer in 2026, and analysts on U.S. Farm Report warned that higher input costs could shift 1 million to 1.5 million acres from corn to soybeans this spring [8].

John Boyd Jr., a Virginia farmer, told NBC News that his supplier warned fertilizer shipments "may not arrive as expected" due to conflict disruptions [1]. The National Corn Growers Association reports that corn farmers are already losing 85 cents per bushel, with corn prices down nearly 50% since 2022 while fertilizer and pesticide costs have barely eased [8].

"Fertilizer markets are globally integrated, so supply disruptions in one region can influence prices and availability elsewhere," said Faith Parum, an economist at the American Farm Bureau Federation [1].

Oil and the Hidden Tax on Food

The fertilizer shock is compounded by surging energy costs. Crude oil surpassed $100 per barrel on March 9 for the first time in four years, with Brent futures reaching $103.14 [5][7]. U.S. gasoline prices jumped 48 cents per gallon in the first week after the strikes and are now up more than 17% since February 28, while diesel prices have risen 24% [5][6].

Source: Bureau of Labor Statistics

Data as of Mar 14, 2026CSV

Energy costs are woven into every stage of the food supply chain — from running farm equipment to manufacturing fertilizer, from refrigerating storage facilities to fueling the trucks that deliver food to supermarkets. Diesel prices exceeding $4.80 per gallon have already triggered FedEx's 24.25% fuel surcharge [9].

"The bigger impact on consumer prices will not be the impact on agricultural commodities but the fact that energy is a big portion of the total retail food bill," said Joseph Glauber, a senior research fellow at the International Food Policy Research Institute (IFPRI) [3].

Rising fossil fuel prices are also making agricultural biofuels more attractive, creating perverse feedback loops. Soybean oil futures hit their highest price in 2.5 years within the first week of the war, and Brazilian sugar mills are expected to prioritize ethanol over sugar production, potentially raising global sugar prices as well [6].

When Will Grocery Shoppers Feel It?

The consensus among agricultural economists is nuanced. If the conflict ends quickly — as President Trump has suggested it might — consumer grocery prices may escape largely unscathed. "If we're talking just a few weeks, very likely you're not going to see this show up in your grocery receipts," said Dr. David Ortega, a food economist at Michigan State University. "But if we're talking a month or more, a few months, then it's a different story" [9].

Price increases typically lag 6 to 12 months behind supply shocks, meaning the full effects may not appear at grocery stores until late 2026 or early 2027 [9]. But the trajectory was already troubling before the war. The USDA had forecast overall food price inflation of 3.1% in 2026, with grocery prices rising 2.5% and restaurant prices climbing 3.7% [10]. Food prices in January 2026 were already 2.9% higher than a year earlier [10].

Source: CSIS / UNCTAD

Data as of Mar 14, 2026CSV

Certain categories face steeper increases. Beef and veal prices were already predicted to rise 5.5% in 2026, sugar and sweets 6.7%, and non-alcoholic beverages 5.2% — forecasts that were made before the Hormuz closure added new inflationary pressure [10]. Goldman Sachs has raised its U.S. recession probability to 25% [9].

Dr. Ricky Volpe of Cal Poly noted that energy and food prices are "very strongly correlated," pointing out that "we've seen oil top $100 a barrel before and that happened to coincide with significant food price inflation" [9]. Food prices remain nearly 24% above pre-COVID levels [9].

The Global South Faces the Gravest Threat

While American consumers may face higher grocery bills, the crisis poses existential risks in the developing world. Sub-Saharan Africa is the most vulnerable region: over 90% of the fertilizer consumed there is imported, mostly from outside the continent [3][6]. Fertilizer use is already low, and further price increases are likely to reduce usage even more, cutting yields for nitrogen-intensive crops like maize — a key staple — and deepening food insecurity [3].

Asia faces enormous exposure. The region imports 64% of its ammonia and more than 50% of its sulfur and phosphates from the Gulf [3]. India's urea producers have already begun cutting output, with the monsoon planting season looming in June [6]. Southeast Asian urea prices jumped over 40% since the conflict began [6]. China, India, and South Korea account for 52% of LNG imports through the strait [6].

Brazil, the world's largest fertilizer importer at 49.11 million metric tons in 2025, has so far weathered short-term disruptions, but officials warn that a prolonged closure threatens availability [6].

The World Food Programme is seeking $200 million to sustain food assistance operations across the Middle East, where the conflict is directly displacing populations and disrupting local food production [3].

No Easy Alternatives

The global fertilizer market has limited options for rerouting supply. Russia, which accounts for one-fifth of global fertilizer trade, faces its own export limits and has prioritized domestic markets [6]. China maintains phosphate and urea export restrictions set to expire in August 2026 — restrictions the conflict "may encourage China to extend" to protect domestic markets [6].

There are no viable alternative shipping routes with infrastructure capable of handling the displaced volumes [6]. The United States has no strategic fertilizer reserves, and domestic production cannot scale quickly enough to fill the gap [6]. A 30-day transit time from the Persian Gulf means that even if the strait reopened today, March and April planting windows would remain at risk [6].

Ceasefire Prospects Remain Dim

The duration of the crisis depends entirely on geopolitics, and the signals are not encouraging. Trump has said the war may end "soon" because there is "practically nothing left" to bomb, but Israeli Defence Minister Israel Katz has stated that "the operation will continue without any time limit" [11]. Trump has demanded Iran's "unconditional surrender," while Iranian President Masoud Pezeshkian has laid out conditions including compensation and guarantees against future attacks [11]. Iran's foreign minister has rejected the idea of a ceasefire or new talks entirely [11].

Experts at CSIS warn that even if active hostilities cease, damaged facilities, disrupted logistics, and elevated shipping risks could leave energy and fertilizer markets strained for weeks or months afterward [6].

What to Watch

The coming weeks will determine whether this becomes a manageable disruption or a full-blown food crisis. Key indicators include China's decision on extending its fertilizer export restrictions, the translation of price shocks into measurable planting acreage changes in the U.S. and globally, the evolution of agricultural commodity futures during the spring planting window, and — most fundamentally — the magnitude and duration of the Strait of Hormuz closure itself [6].

For American consumers, the war's impact on food prices may prove to be the conflict's most tangible domestic consequence — a reminder that in a globally integrated economy, a chokepoint 7,000 miles from Iowa cornfields can reach all the way to the kitchen table.