The conflict in the Middle East is affecting the global economy, inflation, and supply chains, according to research from 11 sources. A central factor is the Strait of Hormuz, a crucial route with 20% of the world's oil and gas passing through it, based on research from six sources. Iran has warned ships not to pass through the Strait of Hormuz, affecting global shipping, according to Iranian authorities. This warning has contributed to shipping slowdowns in the critical waterway.
About 20 million barrels of oil transit through the Strait of Hormuz daily, worth about $500 billion annually, the U.S. Energy Information Administration reports. Disruption in oil supplies from this chokepoint will lead to spikes in oil prices and global inflation, research from four sources indicates. Furthermore, Qatar's LNG supply through the Strait of Hormuz is affected, potentially triggering a global gas supply crisis, according to research from two sources. The Strait carries around a quarter of global seaborne oil trade, along with significant volumes of LNG and fertilizers, research from 11 sources confirms.
Health minister Mark Butler said the Albanese government wanted the 'lightest possible touch' interventions as fuel supply issues loomed.
Key oil and gas facilities in Gulf states, including a major LNG production base in Qatar, have been damaged, according to research from 11 sources. The exact extent of this damage and its impact on global supply remains unclear. The EU relies on energy imports, making it vulnerable to global energy disruption, with 6% of its LNG imports coming from Qatar via the Strait of Hormuz, research from 11 sources states. Euroconsumers members are seeing rising petrol prices and fear rising home energy bills, according to the consumer group's members.
In Italy, petrol and diesel prices increased by at least 3% since the start of the conflict, with peaks of almost +6% for diesel, the Italian member Altroconsumo reports. In response, Italy has taken measures to reduce gasoline and diesel prices at the pump by 25 cents per liter, according to the Italian government. Oil prices have soared to close to $120 per barrel due to the conflict, research from 11 sources indicates. Brent Crude oil prices have surged well above $100 per barrel, according to further research.
NFF president Hamish McIntyre said, 'Growers are deciding whether they can afford to buy fertiliser, fuel the tractor and sow a crop. Many will need to make that call before Anzac Day and some in horticulture are already there.'
China is feeling strain from the oil supply disruption but is in a better position due to years of statecraft and domestic resources, research from 11 sources suggests. China uses an estimated 15 to 16 million barrels of oil daily, with Gulf countries accounting for a major source of imports, market analysts say. Russian oil accounts for nearly a fifth of China's energy imports, making Moscow its biggest oil supplier, research from 11 sources notes. Coal is the dominant source of power for most of China's electricity, and China is the world's largest coal producer, according to the same research.
The war in Iran is adding stress to U.S. farmers, who are facing record high costs and lower profits, research from 11 sources indicates. The blockage of the Strait of Hormuz is expected to increase costs for U.S. farmers, as about 20% of fertilizer used is produced by a Qatari facility, according to research from 11 sources. Farmers have seen rising production costs since the pandemic, with revenues not keeping up, says Jonathan Coppess, an associate professor. Historically, President Donald Trump’s tariffs have raised costs for fertilizers and farm equipment, research from 11 sources notes, and the USDA paused funding that supported farmers adopting conservation practices in 2025, according to further research.
Hamish McIntyre said, 'Without certainty on fuel and fertiliser, some will scale back, and that has real consequences for food production and prices.'
Fertilizer prices have soared since the U.S. and Israel attacked Iran on Feb. 28, leading to shipping slowdowns in the Strait of Hormuz. About 15% of fertilizer imports to the U.S. are from the Middle East, with half the global supply of urea and 30% of ammonia from the region, the American Farm Bureau Federation reports. Some farmers may not be able to obtain fertilizer at any price due to supply issues, says Zippy Duvall, president of the American Farm Bureau Federation. There is disagreement on the exact impact, with one estimate stating 20% of U.S. fertilizer comes from a Qatari facility, while another says 15% of U.S. imports are from the Middle East.
There isn't enough fertilizer stockpiled in warehouses to meet demand in the coming months, according to Harry Ott of the South Carolina Farm Bureau. Fertilizer prices likely won't quickly fall even if the Iran war is resolved due to existing supply issues, says Jacqui Fatka, a farm supply economist. The timeline for resolution of the Strait of Hormuz disruptions and their full impact on global food production remains uncertain.
Hamish McIntyre said some farmers were already rationing their own fuel and delaying or even cancelling their harvests or planting.
The World Bank Group is working to address challenges from the Middle East conflict, including shipping disruptions and rising costs, according to the institution. In a statement, the World Bank Group reported crude oil prices increased by nearly 40% between February and March. It also stated LNG prices to Asia rose by almost two-thirds, and nitrogen-based fertilizer prices increased by nearly 50% in March. The immediate economic impacts include sharp increases in transport costs, energy and fertilizer prices, and financial market volatility, says Hamza Ali Malik of the UN ESCAP.
Oil prices have risen by around 45%, gas by 55%, and fertilizer prices by 35% since late February, according to UN estimates. This discrepancy with the World Bank's figures for oil and fertilizer highlights varying assessments of the severity and timing of price inflation. Regional inflation could rise to 4.6% in 2026, up from 3.5% in 2025, UN estimates project.
Hamish McIntyre said, 'Government must consider all options, including temporary tax relief and targeted support measures, to keep businesses operating through this period.'
Governments are implementing diverse policy responses to fuel price spikes. In Sri Lanka, authorities have introduced fuel rationing and shifted schools to a four-day week, research from 11 sources reports. The average price of unleaded petrol in the UK has risen to 150p a litre, according to the RAC. German lawmakers approved cuts to fuel subsidies for farmers, prompting protests, research from 11 sources states, and Germany's government abolished a car tax exemption for farming vehicles and cut tax breaks on diesel used in agriculture, but later watered down the plan, according to further research.
Green diesel has increased by over 50% since the war with Iran began, impacting Irish farmers, says Francie Gorman, President of the Irish Farmers' Association. Fertiliser prices are surging due to the conflict, with disruptions in the Strait of Hormuz affecting EU fertiliser markets, Gorman adds. The IFA has requested the Irish government suspend carbon tax on green diesel and kerosene to support farmers, according to Gorman.
Hamish McIntyre said, 'At the end of the day, if farmers can’t access fuel and fertiliser, they can’t produce food.'
In Australia, farmers say the federal government must help them with tax breaks and underwriting fertiliser purchases to survive the fuel crisis, according to major media reports. Monday’s national cabinet is expected to discuss more assistance to businesses amid ballooning petrol prices, major media reports, though federal and state governments have remained tight-lipped about what would be on the meeting’s agenda. State premiers have urged the Albanese government to take a stronger national coordination role in the crisis, major media reports citing the premiers. What specific assistance measures will be agreed upon remains unknown.
Business groups on Sunday called for help for companies to retain employees and cashflow support as flow-on effects from rising fuel prices began to hit the farming, transport and mining sectors, major media reports citing the groups. The National Farmers’ Federation said on Sunday that the national cabinet must agree on a plan for agriculture, including a guaranteed fuel supply and more support to secure fertiliser, to safeguard food production, according to major media reports. The NFF wants the government to help underwrite purchases of fertiliser for raising crops after Anthony Albanese announced a similar plan for fuel purchases on Saturday, major media reports state. Federal sources said they were keenly aware of the pressures faced by diesel-intensive industries like farming and mining, as well as business concerns, according to major media reports.
Prime minister Anthony Albanese on Saturday said he preferred 'voluntary arrangements rather than any mandating from the top' but said the crisis required 'national leadership' to ensure 'we don’t have eight different systems going eight different directions'.
Governments in Tasmania and Victoria have announced a month of free public transport, major media reports. New South Wales and Western Australia have resisted following suit on free public transport, according to major media reports. State and federal leaders were not expected to back petrol rationing, major media reports. Whether other countries will follow Italy's example in implementing price controls or subsidies is unclear.
Prime minister Anthony Albanese on Saturday said he preferred 'voluntary arrangements rather than any mandating from the top' but said the crisis required 'national leadership' to ensure 'we don’t have eight different systems going eight different directions'. According to major media reports, Health minister Mark Butler said the Albanese government wanted the 'lightest possible touch' interventions as fuel supply issues loomed. NSW transport minister John Graham said on Sunday, 'This situation will last more than a month. We need to keep our powder dry to be able to assist the broader economy. That’s the concern of the New South Wales government, we’re really planning to make sure that we can make...' Asda's executive chair warned that food prices will rise due to the conflict, as farmers face higher costs.
NSW transport minister John Graham said on Sunday, 'This situation will last more than a month. We need to keep our powder dry to be able to assist the broader economy. That’s the concern of the New South Wales government, we’re really planning to make sure that we can make...'
NFF president Hamish McIntyre said, 'Growers are deciding whether they can afford to buy fertiliser, fuel the tractor and sow a crop. Many will need to make that call before Anzac Day and some in horticulture are already there.' McIntyre added, 'Without certainty on fuel and fertiliser, some will scale back, and that has real consequences for food production and prices.' He said some farmers were already rationing their own fuel and delaying or even cancelling their harvests or planting. McIntyre stated, 'Government must consider all options, including temporary tax relief and targeted support measures, to keep businesses operating through this period.' He concluded, 'At the end of the day, if farmers can’t access fuel and fertiliser, they can’t produce food.'