The war involving Iran has triggered sharp increases in global natural gas and fertiliser prices, raising concerns about energy inflation and food production costs worldwide. Disruptions to shipping routes and energy infrastructure in the Gulf region — particularly around the Strait of Hormuz — are driving volatility across energy and agricultural commodity markets.
Gas markets surge as supply routes face disruption
The Strait of Hormuz is one of the world’s most important energy chokepoints, handling around one fifth of global oil and liquefied natural gas shipments. Any disruption to this narrow maritime corridor has immediate consequences for global energy supply chains.
Following the escalation of the Iran conflict, tanker traffic and energy exports in the region have been severely disrupted. The result has been a rapid spike in global energy prices as markets react to the risk of supply shortages.
European wholesale gas prices surged sharply, in some cases rising nearly 40 percent within days as traders scrambled to secure alternative supplies.
The situation worsened when production at key liquefied natural gas facilities in Qatar — a country responsible for roughly 20 percent of global LNG exports — was halted after attacks on regional energy infrastructure. The shutdown triggered one of the biggest gas price spikes since the energy crisis that followed Russia’s invasion of Ukraine in 2022.
Energy analysts warn that prolonged disruption could push gas prices even higher and potentially lead to a new global energy crisis similar to that experienced in Europe in recent years.
Fertiliser markets react to energy shock
Natural gas is a crucial raw material for the production of nitrogen fertilisers such as ammonia and urea. As a result, spikes in gas prices quickly translate into higher fertiliser costs for farmers and agricultural producers.
The Iran war is affecting fertiliser markets through two separate channels: rising energy costs and disrupted shipping routes.
The Middle East is a major global supplier of nitrogen fertilisers, and a large share of international fertiliser shipments passes through the Strait of Hormuz. Nearly one third of global trade in urea — the world’s most widely used fertiliser — moves through the region.
With shipping routes under threat and tanker traffic declining, fertiliser prices have already begun rising. Urea prices have jumped by roughly $60 to $80 per tonne in recent days as traders anticipate supply shortages during the upcoming planting season.
Because fertiliser supply chains operate largely on a just-in-time basis, disruptions can rapidly ripple through agricultural markets.
Food production risks emerging
Higher fertiliser costs have historically translated into increased food prices. Farmers often respond to rising input costs by reducing fertiliser use, which can lead to lower crop yields and tighter global food supplies.
The current situation is particularly sensitive because the Northern Hemisphere planting season is approaching. If fertiliser prices continue rising, agricultural production costs could increase significantly for crops such as wheat, corn and rice.
Food economists note that energy shocks have repeatedly triggered agricultural price spikes in the past. Similar dynamics were observed during the global energy crisis following Russia’s invasion of Ukraine.
Global inflation concerns growing
Economists are increasingly concerned that the Iran conflict could fuel a new wave of global inflation. Rising energy costs affect transportation, industrial production and household energy bills, while higher fertiliser prices threaten agricultural supply chains.
If the conflict continues to disrupt the Strait of Hormuz and regional energy production, analysts warn that the combined impact on energy and food markets could weigh heavily on global economic growth.
For governments and central banks, the situation presents a difficult challenge: balancing geopolitical uncertainty with the risk that another energy shock could push inflation higher across the global economy.
Newshub Editorial in Global — March 4, 2026
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