Iran war sparks global food crisis risk through fertilizer supply shock
Rising fertilizer and energy costs from the Iran conflict threaten crop yields and food prices, hitting developing economies hardest.
The war in Iran, escalating in March 2026, is already sending shockwaves through global agricultural markets by disrupting fertilizer supplies and driving up energy costs-raising the risk of a new global food price surge, particularly across vulnerable developing economies.
At the center of the disruption is the Gulf region, a critical hub for global trade. Roughly 30% of globally traded fertilizers pass through this corridor, while major producers supply key inputs such as urea and ammonia. With the Strait of Hormuz effectively blocked, fertilizer prices have already surged by 30% to 40%, according to Bank of America.
The implications go beyond cost inflation. If farmers reduce fertilizer use due to higher prices or shortages, crop yields are likely to decline. The FAO warns this could lead to reduced output of staple crops, animal feed, dairy, and meat, triggering a ripple effect across global food systems.
Unlike the 2022 Ukraine war, which directly disrupted grain exports, this crisis is hitting agricultural production at its foundation-inputs. The result is a slower but potentially more prolonged shock: lower yields, tighter supply, and sustained upward pressure on food prices.
The impact will vary across regions. Latin America, with agricultural powerhouses like Brazil and Argentina, appears relatively more resilient. However, countries heavily reliant on imports-such as Bangladesh, Kenya, Pakistan, and Somalia-are far more exposed, with fertilizer costs already rising by as much as 40% in some cases.
Energy markets are amplifying the crisis. Since the conflict began, global oil and gas prices have surged by over 50%, increasing production and transportation costs across agricultural supply chains. This is particularly critical for nitrogen-intensive crops like corn and wheat.
In developed economies, food accounts for less than 25% of household spending, but in many emerging markets, it represents between 30% and 50%, making them far more vulnerable to global price volatility, according to Moody's.
Beyond economics, the risks extend to social stability. Previous food price spikes have triggered unrest across multiple regions, putting governments on alert as inflationary pressures build once again.
Institutions such as the European Bank for Reconstruction and Development (EBRD) are already considering support measures, including financing access to fertilizers. Meanwhile, the FAO warns that if the conflict extends beyond a few weeks, it could disrupt planting cycles and significantly impact global yields.
The signal is clear: this is no longer just an energy or geopolitical crisis. It is rapidly evolving into a systemic shock for the global food system, where the combination of expensive fertilizers, volatile energy, and strained logistics could redefine food prices worldwide in the coming years.
