The Real Threat From The Iran War Hits Farmers, Not Fuel Pumps

Authored by Michael Wilkerson via The Epoch Times (emphasis ours),

Prices for retail diesel and gas have each risen by over a third ($1.30+ and $1.00 per gallon, respectively) since the launch of Epic Fury. Americans learned in the 1970s that Middle East conflict means energy pain, and that lesson has been reinforced through every subsequent Gulf crisis. This time, however, the more consequential threat to American household budgets is not the fuel pump. It is quietly moving through the global fertilizer supply chain, and it will impact hundreds of millions of Americans who depend on the food that comes out of the ground each fall.

The distinction between fuel and food inflation matters. America’s position in the natural gas market—specifically liquefied natural gas (LNG), the fuel at the center of this conflict—is stronger than it was even a few years ago. The United States is now the world’s largest LNG exporter. Our domestic production runs at over 109 billion cubic feet per day. Our export terminals are running near full capacity. As substantial portions of Qatar’s Ras Laffan complex have been taken offline and the Strait of Hormuz has been effectively closed to tanker traffic, European gas benchmarks have surged more than 60 percent and Asian spot prices have nearly doubled. The American benchmark, Henry Hub, has barely moved. The Energy Information Administration expects it to average around $3.80 per million BTU for 2026—roughly where it was before the war began. The paradox of being the world’s largest LNG producer is that we cannot easily move our gas to the global market when terminals are already at capacity, which means that global gas scarcity does not drain our domestic supply. On natural gas, the moat holds.

The story on fertilizer is different, and it deserves attention.

Fertilizer is the link between energy and food. Natural gas is not just a fuel; it is the primary feedstock for synthetic nitrogen fertilizers through a process developed over a century ago called the Haber–Bosch method. Natural gas goes in, ammonia comes out, ammonia becomes urea, urea gets spread on cornfields in Iowa and wheat fields in Kansas and rice paddies in Asia. About 80 percent of nitrogen fertilizer production costs are attributable to natural gas. When the Strait of Hormuz is practically shuttered, you do not just block oil tankers and LNG carriers. You block the ships carrying urea and ammonia that the world’s farmers were expecting to receive this spring.

The numbers are sobering. The Persian Gulf region accounts for roughly a third of globally traded urea exports and approximately 25 percent of ammonia trade. Qatar’s state fertilizer company—QAFCO, considered the world’s largest urea supplier—shut down its plant when gas was cut. Saudi Arabia and other Gulf producers have seen exports stall. China, the other major global fertilizer exporter, has restricted outbound shipments to protect its domestic supply. These two supply sources together represent a substantial share of the global market, and both are simultaneously constrained.

For American farmers, the timing is the cruelest part. Urea prices at the New Orleans import hub jumped more than 30 percent in the first week of the war, and by late March had risen roughly 77 percent from their December 2025 levels. Spring is the season when the largest volumes of fertilizer move into the country. Agriculture Secretary Brooke Rollins acknowledged that approximately 25 percent of American farmers had not yet purchased fertilizer for the planting season when the Strait closed. Those farmers are now facing input costs that look nothing like what they budgeted. The American Farm Bureau wrote to President Donald Trump calling for relief, and the image painted—a farmer who a few months ago could buy a ton of urea for the equivalent of 75 bushels of corn now needing 126 bushels for the same ton—captures the arithmetic of the squeeze.

That squeeze has limits that should be acknowledged. The majority of American farmers (an estimated 75 percent) did lock in their fertilizer before the outbreak of war. American agriculture is large, diversified, and resilient in ways that smaller or more import-dependent agricultural economies are not. The domestic natural gas that feeds American fertilizer producers is cheap by global standards, and domestic producers have a meaningful cost advantage over Gulf competitors at current prices. Buffer stocks exist. Markets will adjust. Other supplier nations will expand.

For American consumers, the impact will be real but delayed and partial. Commodity markets are already pricing in some reduction in crop yields globally. Global grain and oilseed production that depends on fertilizer applications made this spring will be affected by how long the disruption lasts. The food price consequences of a bad planting season arrive on grocery shelves six to twelve months later, not tomorrow. This is not a moment for panic. It is a moment for attention.

It is also an indictment of a supply chain that was allowed to grow dangerously concentrated in one of the world’s most volatile regions. The same mistake was made in Europe by dependency on Russian pipeline gas, and the European Union spent four years trying to unwind it. The dependence on Gulf fertilizers accumulated quietly over decades, driven by the same logic: the gas was cheap, the production was efficient, the ships kept running. The Strait of Hormuz is the chokepoint.

Food inflation will be visible later this year, although not nearly as severe in the United States as in the rest of the world. There is reason for optimism in the American position. We have the natural gas, the agricultural infrastructure, the fertilizer production capacity, and the market depth to weather this disruption better than almost any nation on earth. The war will end, the Strait will reopen. Crops will be planted. Some of the disruption will prove temporary. What should not be temporary is the lesson about dependence on a single chokepoint for one-third of a food input that has no short-term substitute. The Haber–Bosch process feeds 8 billion people. Allowing the ships that carry it to bottleneck through a strait only around two dozen miles wide in a war zone is a risk that was hiding in plain sight.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.

Tyler Durden Sat, 04/04/2026 - 20:25