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Why blocking Hormuz could threaten global food supplies
2026-03-09 20:05:03 / BOTA
While much of the world is focused on the impact of oil disruptions in the Strait of Hormuz, the current blockade could also pose long-term risks to the global food supply.
At least 10 ships have been attacked in the Strait of Hormuz since hostilities in the Persian Gulf began on February 28, with many sailors believed to have lost their lives in the latest Iranian attack on a United Arab Emirates-flagged tugboat that had been sent to assist a container ship.
Although the US offers maritime escorts and a $20 billion insurance program for oil tankers, data from platforms that track maritime traffic shows that hundreds of ships remain stranded on both sides of this waterway.
Insurance premiums and freight rates have increased significantly, prompting shipping companies to halt operations.
In addition to handling almost 30% of the world's oil exports and 20% of natural gas supplies, up to 30% of global fertilizer exports also pass through the Persian Gulf's only access to the open ocean, a crucial factor for the world's food production.
Hostilities in Hormuz are already sowing the seeds of inflation.
The price of urea, a type of chemical fertilizer, has risen to more than $600 per ton, from $450 last week.
Menelaos Ydreos, secretary general of the International Gas Union, acknowledged that the main impact of the disruptions will be on oil and gas, but stressed the two-way nature of trade in the strait.
"There is a significant amount of food entering the region that has now been cut off. This food not only serves to meet regional needs, but in some cases is also re-exported further," Ydreos said.
But he also raised the alarm about the impact on many other industries.
“Petrochemicals are needed for pharmaceuticals, for plastics and for many other products. I think we need to look at the disruption in its entirety and not just as an issue of gas and oil. In fact, it is much more serious than that.”
The Persian Gulf is a key engine fueling global food production, supplying some of the world's largest exports of nitrogen fertilizer.
According to the International Food Policy Research Institute (IFPRI), Qatar, Saudi Arabia, Bahrain and Oman together produce 15 million metric tons per year of urea, diammonium phosphate (DAP) and anhydrous ammonia.
Countries like India, the US, Brazil and Australia rely heavily on these exports to maintain agricultural yields.
There is also a strong link with natural gas prices. Natural gas accounts for about 70% of the cost of producing nitrogen fertilizers, so an increase in prices in the oil market would also be reflected in fertilizer prices.
But while reserves and inventories provide some cushion for oil prices to withstand shocks in the short term, fertilizer markets have less room for manoeuvre.
Joseph Glauber, senior fellow emeritus at IFPRI, explained: “Many fertilizer products can be easily stored, but because they have a very high value compared to the feedstock (e.g., natural gas), and because natural gas is produced year-round, storage costs make it more economical to purchase them as needed.”
Orders are based on seasonal demand, which aligns with crop cycles and weather conditions. This means that fertilizer inventories are typically made to order and are intended for immediate delivery.
“In the US, producers often purchase fertilizers and agricultural chemicals in the fall to ensure sufficient supplies for planting,” he added.
Bitter taste: Food products that may become more expensive
So, which food products could become more expensive?
If hostilities in the Strait of Hormuz continue, it could be that basic food products such as wheat, corn, bread, pasta and potatoes are sold at higher prices in supermarkets around the world.
Perishable products, such as dairy and seafood, could also be affected. Meanwhile, soybean oil and animal feed prices could rise, which could force farmers to change production plans.
However, there is no reason to panic at the moment, as experts like Glauber expect only a small impact in the short term. The most important factor remains the price of oil.
“Higher oil and energy prices in general could increase costs at the retail level, as transportation and processing costs increase after the farm gate. This could reinvigorate food price inflation over time,” Glauber said.
The same applies to food security. Outside the Persian Gulf, concerns about food insecurity remain limited. However, this could change if Hormuz remains blocked for a long period. / Euronews
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