As energy markets react to the near-total closure of the Strait of Hormuz, the lesser-reported risk to global food security is coming into sharper focus. The consequences of the US-Israeli strikes on Iran, and Iran's retaliation across the Gulf region, extend well beyond the oil market.
On 28 February 2026, US and Israeli forces launched joint strikes on Iran, in what the United States dubbed "Operation Epic Fury," targeting Iranian military infrastructure and leadership. The conflict has since escalated into a multi-front crisis with significant implications for global supply chains.
Much attention has rightly focused on oil. On 2 March, a senior adviser to Iran's Islamic Revolutionary Guard Corps (IRGC) announced that the Strait of Hormuz, through which 20% of the world's oil and gas is transported, was "closed," sending oil prices above $100 per barrel.1 Traffic through the Strait has fallen from around 130 ships a day before the crisis to single digits in early March, a decline of more than 95%.2 The Strait remains technically open, but the combination of active attacks on shipping and prohibitive insurance costs has reduced traffic by more than 90%, making it functionally closed for most commercial operators.
About 27% of the world's oil exports, 20% of global liquefied natural gas exports and between 20% and 30% of global fertiliser exports pass through the Strait.3 This includes key farming inputs, such as the most common fertilisers: urea, ammonia, phosphates and sulphur. Unlike the Russia-Ukraine crisis of 2022, which struck at a key breadbasket region (defined as areas that produce large quantities of food, such as cereals like wheat or corn for export, supporting food supply chains in many countries) – this conflict involves a global energy hub. The potential impact is nonetheless similar, because of the close correlation between energy and food markets.4
Energy disruption and food security are closely linked through fertiliser. Gulf countries are among the world's largest producers of nitrogen-based fertilisers, which depend on natural gas as their primary feedstock – the raw material used to produce them. Around 30% of global urea trade comes out of Iran and the Hormuz-constrained countries.5 The continued closure has effectively trapped 35% of the world's seaborne urea and phosphate supply, with no viable pipeline or land-based alternatives capable of moving bulk ammonia and urea from the Persian Gulf to international markets.6
The price response has been swift. Urea and ammonia prices have surged by around 50% and 20% respectively since the conflict began, according to Oxford Economics.7 The timing is also particularly damaging. Even if the Strait of Hormuz were to open soon, restarting production and transport for fertilisers and their components could take weeks. With the spring planting season already under way, this delay could be particularly worrying for farmers in the Northern Hemisphere.8 Certain crops, such as corn, are especially exposed given it accounts for 95% of total grain and feed grown in the US and relies heavily on nitrogen application.9
Unfortunately, the impact on household budgets is already being felt. Even before the conflict, food prices in 2026 were forecast to rise faster than in either of the previous two years.10
As with the Russia-Ukraine crisis, the risks are disproportionately concentrated in the Global South. Emerging market countries are more likely to feel the brunt, and African nations that import large volumes of grains face particularly acute exposure. India, which imports nitrogen fertilisers as well as the natural gas used to produce them domestically, also faces high vulnerability.11 The World Food Programme estimates that almost 45 million more people could be pushed into acute hunger if the conflict does not end by midyear.12
Closer to home, Western nations are not immune. Food inflation climbed 2.4% year-on-year in February 2026 in the US, and UK consumers face similar pressure through import costs and energy-linked food processing. For the five million people in the UK already struggling to put food on the table, the situation is likely to get harder before it gets better.
Sustainable agriculture is of growing interest and represents one of several structural trends shaping our investment thinking and is reflected in parts of our portfolios. It can offer a structural response to food system vulnerabilities. By reducing dependence on external fertiliser inputs through precision farming or biological alternatives, innovative companies are helping to insulate food production from geopolitical shocks.
Longer-term, technology is quietly reshaping how the world farms. Companies like John Deere13, which manufactures agricultural machinery, are using artificial intelligence, satellites and drones to help farmers monitor their crops and use fewer chemicals. This enables them to reduce both costs and reliance on volatile commodity markets. This kind of innovation makes certain agricultural businesses more resilient to the disruptions we are seeing today.
This conflict has made one thing clear: food supply chains can be subject to geopolitical risk. Unlike oil, fertiliser has no strategic reserves and no quick fix when supply is disrupted, and as we have seen, the consequences move swiftly from the shipping lane to the supermarket shelf. Looking ahead, companies may look to reduce dependence on globally traded inputs, through technology, domestic production or supply chain resilience, to be structurally better placed to weather these potential shocks.
[2] Dire fertiliser shortage a lurking threat due to Hormuz crisis | UN News
[3] The Iran war: Potential food security impacts | IFPRI
[4] Devex Dish: How the Iran war could trigger a global food crisis | Devex
[5] Fertilizer prices surge amid Iran war, sparking food security warnings
[7] Fertilizer prices surge amid Iran war, sparking food security warnings
[10] Fertilizer prices bring more pain for American farmers amid war in Iran | CNN Business
[11] Fertilizer prices surge amid Iran war, sparking food security warnings
[12] Devex Dish: How the Iran war could trigger a global food crisis | Devex
[13] Company names are for illustration only and do not constitute recommendations to buy or sell any security.
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