The global energy system entered a historic crisis on February 28, 2026, when U.S. and Israeli airstrikes on Iran triggered a conflict that effectively shut down the Strait of Hormuz, cutting off 20% of global oil and LNG supply-an event with immediate consequences for agriculture, input costs, and global food security.

The scale of disruption is already being compared to-and even surpassing-the 1973 oil embargo. Approximately 400 million barrels have been removed from global supply, while oil prices have surged more than 50%, exceeding $110 per barrel, with Middle Eastern crude nearing $164.

For the agricultural sector, the impact is both direct and systemic. Fuel is a critical component of farm operations, from planting and irrigation to harvesting and transportation. Rising diesel prices are increasing input costs across the board, squeezing margins for producers despite stronger commodity prices.

At the same time, the crisis is severely disrupting fertilizer markets. Natural gas-an essential input in nitrogen fertilizer production-has surged in price following damage to key energy infrastructure across the Middle East. This is rapidly translating into higher fertilizer costs worldwide.

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Nitrogen-based fertilizers such as urea have already risen between 30% and 40% since the conflict began. Compounding the situation, roughly one-third of global fertilizer trade typically moves through the Strait of Hormuz, which is now effectively blocked.

In the United States, farmers are reporting tightening supplies ahead of the spring planting season, raising concerns about yields and acreage decisions. Many producers may need to rely more heavily on precision agriculture to optimize limited inputs and maintain productivity.

Globally, fertilizer production is also under pressure. Facilities in major importing countries are reducing output or shutting down due to feedstock shortages, further tightening supply across the agricultural supply chain.

Governments worldwide are implementing emergency measures to reduce energy consumption, including fuel rationing and restrictions on transportation. While necessary, these actions risk slowing global trade flows, including agricultural exports.

The macroeconomic impact is also intensifying. Rising energy prices are fueling inflation, increasing financial pressure on farmers, co-ops, and agribusinesses. Although higher crop prices may provide partial relief, market volatility is complicating planning and risk management.

The most significant concern is food security. According to the United Nations, prolonged disruption could reduce global production of staple crops, feed grains, and livestock. Fertilizers account for up to 50% of production costs in some regions, meaning sustained shortages could sharply limit output.

For U.S. policymakers, the crisis is likely to accelerate discussions around the farm bill, domestic fertilizer production, and long-term sustainable agriculture strategies aimed at reducing dependence on volatile global inputs.

Analysts increasingly agree that the market may only rebalance through demand destruction, as high prices force reduced consumption. For agriculture, this signals a period of rapid adaptation, where efficiency, technology adoption, and risk management will be critical.