Missiles to meals: Iran war pushes world towards food crisis, inflation to hit hard

The escalating conflict in West Asia is rapidly transforming from a geopolitical crisis into a global economic and food security challenge.

“Energy shock to food prices: How Iran war is raising global inflation risks Economists warn the impact of the US-Israel war with Iran could soon be felt in supermarket prices around the world - Rising oil prices and shipping disruptions linked to the war are beginning to filter through global food systems, say experts - ‘There are three main channels of impact – three F’s: fuel, fertilizer and financial markets,’ says Chris Barrett, an agricultural economist at Cornell University The US-Israel war with Iran is beginning to affect more than just energy markets, as economists warn its impact could soon be felt in supermarket prices around the world”

Anadolu Agency

Attacks on key energy infrastructure and LNG supply disruptions are impacting fertilizer production worldwide, particularly urea which is critical for agriculture.

Anadolu Agency

This disruption threatens to reduce crop yields and increase food prices globally.

What began as an energy shock is now evolving into a food and inflation crisis.

The Economic Times reports that the war is pushing the world towards a food crisis with inflation set to hit hard.

Anadolu Agency shows Middle East urea prices rose by more than $90 per metric ton in one week in early March – a 19% increase.

Urea prices are now about 40% higher than before the war, according to the International Food Policy Research Institute.

WRAL Raleigh emphasizes that fighting has all but halted oil exports through the Strait of Hormuz.

This waterway carries about a fifth of the world's oil and liquefied natural gas, creating significant energy market disruption.

The economic impact is being transmitted through multiple channels including fuel, fertilizer, and financial markets.

This creates a complex web of price increases that will affect consumers worldwide.

The Economic Times

Chris Barrett, an agricultural economist at Cornell University, explains there are three main channels of impact – three F's: fuel, fertilizer and financial markets.

A possible El Nino event could worsen pressure on food markets in some regions, Barrett said.

The fastest effects are coming from fuel, as higher oil prices raise transport costs.

Transport costs make up a large share of the final price consumers pay for food.

This impact is strongest in countries far from ports or with weak infrastructure.

Parts of sub-Saharan Africa and Central Asia are particularly vulnerable.

Financial markets represent a third channel where rising costs push interest rates higher.

Increased borrowing costs and a stronger US dollar make imports more expensive for developing nations.

Fertilizer disruptions pose a particularly significant long-term threat to global food security.

“HANOI, Vietnam (AP) — The war in Iran is exposing the world’s reliance on fragile fossil fuel routes, lending urgency to calls for hastening the shift to renewable energy”

WRAL Raleigh

The Gulf region is a major supplier of key inputs such as urea and ammonia.

Natural gas – heavily traded through the region – is essential for producing nitrogen fertilizers.

The UN's Food and Agriculture Organization (FAO) has warned that energy prices remain a key risk.

Fertilizer production recovered in 2024 and 2025 after earlier disruptions.

Joseph Glauber, a research fellow at IFPRI, explains the first effects would likely be felt in the Gulf.

Gulf countries rely heavily on imports of grains, vegetable oils and sugar.

A prolonged blockage would force shipments to reroute through longer and more expensive alternatives.

These include the Red Sea, Caspian Sea or overland routes.

Countries including India, Brazil, Thailand, Bangladesh and Türkiye depend heavily on the Gulf for nitrogen fertilizers.

Even large economies like the US and Australia rely on these supplies.

Regional variations in vulnerability are stark across the globe.

Poorer countries that depend heavily on imports and have weaker infrastructure face the most severe impacts.

Anadolu Agency

Barrett estimates food prices could rise by about 0.5% to 1% in the US and Canada over the next one to two months.

Bigger increases are possible in poorer, landlocked countries that rely on imports in Africa, Asia and Latin America.

Southern African countries that depend on maize imports may be hit harder, especially if El Nino affects harvests.

Wheat-importing regions in North Africa and West Asia also face significant risks.

India is already facing a shortage of cooking gas.

This is driving a rush to buy induction cooktops and raising fears of restaurant shutdowns.

Fertilizers and ceramics industries may also be hit in India.

China, despite being the world's largest importer of crude oil, has built larger renewable energy buffers.

These buffers have reduced China's vulnerability to supply and price shocks compared to other nations.

The crisis is lending urgency to calls for hastening the shift to renewable energy.

“Search + Business News›[](https://economictimes”

The Economic Times

The world's reliance on fragile fossil fuel routes has become increasingly apparent.

The Economic Times

Renewable power is now competitive with fossil fuels in many places.

More than 90% of new renewable power projects worldwide in 2024 were cheaper than fossil-fuel alternatives.

This data comes from the International Renewable Energy Agency.

James Bowen of ReMap Research states that 'These crises regularly occur... They are a feature, not a bug, of a fossil fuel-based energy system.'

China has led the world in renewables expansion.

About one in 10 cars in China are electric according to the International Energy Agency.

India has expanded its use of clean energy more slowly than China.

Renewable energy that relies on domestic resources like sun and wind provides better insulation from imported fuel price shocks and supply disruptions.