Escalating conflict involving Iran, the United States and Israel is sending shockwaves through global energy, fertilizer and grain markets as shipping disruptions in the Strait of Hormuz threaten one of the world’s most critical trade corridors. According to a new analysis by the International Food Policy Research Institute (IFPRI), prolonged disruptions could drive up agricultural input costs, destabilize food supply chains and increase food security risks in import-dependent regions.

Joseph Glauber
Agricultural Economist

In a new analysis published by the International Food Policy Research Institute (IFPRI), agricultural economist Joseph Glauber warns that the escalating conflict could have far-reaching consequences for global food systems. “Disruptions to shipping through the Strait of Hormuz could quickly ripple through global energy, fertilizer and food markets, raising production costs and threatening food security in import-dependent regions,” Glauber notes.

Located between Iran and Oman, the Strait of Hormuz is one of the most strategically important maritime chokepoints in the global economy. Roughly 27% of global oil exports and about 20% of global liquefied natural gas (LNG) shipments pass through the waterway. The corridor is also a major route for agricultural inputs, carrying 20–30% of global fertilizer exports, including urea, ammonia, phosphates and sulfur.

Drone and rocket attacks targeting vessels in the Gulf have significantly increased maritime risk in the region. War-risk insurance premiums have surged, and shipping companies have begun avoiding the corridor. As a result, maritime traffic through the Strait of Hormuz has fallen by more than 70% since the conflict escalated, according to the IFPRI analysis.

ENERGY AND FERTILIZER PRICES SURGE

Commodity markets have already reacted strongly to the escalating tensions. By early March, May 2026 crude oil futures had increased by more than $10 per barrel, representing roughly a 15% rise since the conflict began. Natural gas markets have responded even more dramatically. The Dutch TTF benchmark for European natural gas has risen by more than 50% compared with pre-conflict levels.

Fertilizer markets have also tightened significantly.

According to IFPRI:

• Middle East urea prices exceeded $590 per metric ton on March 5,
• rising more than $90 per ton in one week, equivalent to roughly 19%. 

Meanwhile, U.S. Gulf diammonium phosphate (DAP) prices reached approximately $655 per ton, increasing by more than $30 per ton, or roughly 5%. Some estimates suggest that as much as one-third of global fertilizer trade could be affected if disruptions to shipping through the region continue.

GULF COUNTRIES FACE DIRECT FOOD SECURITY RISKS

The countries most immediately exposed to the disruptions are those of the Persian Gulf, which depend heavily on imported food. Many Gulf states rely on international markets for staple commodities such as wheat, maize and rice, much of which passes through maritime routes connected to the Strait of Hormuz.

Per-capita wheat consumption exceeds 100 kilograms per person per year in several Gulf countries, reflecting the importance of wheat-based foods in regional diets.

Joseph Glauber warns that prolonged disruptions could have direct consequences for regional food security. “A prolonged conflict would likely choke global sea trade with the Persian Gulf region, raising the costs of energy and fertilizer prices globally, directly threatening food security in Gulf countries (which depend on imports of grains, oilseeds, and vegetable oils through the Strait of Hormuz), and potentially affecting food production and prices in other regions as well.”

IRAN ALREADY EXPERIENCING HIGH FOOD INFLATION

Iran itself faces significant vulnerabilities within its domestic food system. According to the IFPRI analysis, retail food prices in Iran were already 42% higher year-on-year as of September 2025. Further disruptions to imports, combined with higher energy and fertilizer costs, could exacerbate inflationary pressures and deepen food security challenges inside the country.

SECOND-ROUND IMPACTS ON GLOBAL AGRICULTURE

Beyond the immediate regional effects, the conflict could generate broader ripple effects across global agricultural markets. Higher fertilizer prices may affect farmers’ input decisions and crop production in multiple regions. Glauber notes that the timing of the conflict may limit immediate impacts in some regions, but longer-term risks remain significant. “The immediate impact may be relatively small, since many farmers would have already made input purchases for spring planting in the Northern Hemisphere; however, a prolonged conflict could affect planting decisions and yields in the Southern Hemisphere, as well as fertilizer applications for rice in South and Southeast Asia.”

Reduced fertilizer use could ultimately lower crop yields and tighten global grain supplies, increasing volatility in food markets. 

ALTERNATIVE TRADE ROUTES ARE LIMITED

Countries may attempt to reroute trade through alternative corridors, but such options are limited and more expensive. Some grain shipments from Russia could potentially move overland through Iran, or via Syria and Türkiye into Iraq, though these routes would significantly increase transport costs. Saudi Arabia may redirect some imports through Red Sea ports, but that corridor has also been disrupted. Since December 2023, attacks on commercial vessels in the Red Sea have reduced daily shipping volumes by roughly 60%.

IMPLICATIONS FOR FOOD SECURITY

In his analysis, Joseph Glauber said the conflict’s immediate impacts on food security are “largely regional.” He noted that countries in the Persian Gulf are highly dependent on imports, and warned that any prolonged disruption to shipping through the Strait of Hormuz would have a significant impact on food supplies. Shipping through less contested routes, he added, would be challenging and would at the very least push food prices higher.

Glauber also pointed out that the United States had announced efforts to provide naval escorts through the Persian Gulf and the Strait of Hormuz, along with war-risk insurance for carriers. However, he said it remained unclear whether those measures would make much difference, let alone overcome what he described as the effective closure of the strait to shipping. As a sign of the disruption already under way, he noted that Maersk had temporarily suspended cargo bookings in the Persian Gulf as of March 4.

Looking further ahead, Glauber warned that a prolonged disruption to oil, LNG and fertilizer exports from the Persian Gulf would likely lead to further increases in energy and fertilizer prices, while forcing importers of those products to seek alternative suppliers. For many agricultural producers already facing high input costs and low commodity prices, he said, operating margins would tighten further, likely affecting both planting decisions and input use.

Drawing on the experience of recent shocks such as the COVID-19 pandemic and the war in Ukraine, Glauber said markets could help mitigate the adverse effects of the conflict, provided that countries avoid export restrictions and other “beggar-thy-neighbor” policies that would worsen the disruption. He warned that much is at stake as the conflict unfolds and policymakers respond, adding that higher energy and input costs risk reigniting global food inflation just as retail food prices in many countries had begun returning to more historical levels.