Hormuz Crisis Pushes Farmers to Pay Higher Costs Despite Oil Recovery

Gulf countries have managed to restore crude oil exports to pre-war levels, but the energy market remains disrupted. According to Kpler, daily crude exports from Middle Eastern countries excluding Iran reached 19.5-22.5 million barrels in late September, surpassing the pre-war level of around 18 million barrels. The recovery was driven by alternative routes, with about 40% of crude oil exports now bypassing the Strait of Hormuz, up from 17% before the conflict. Saudi Arabia and the UAE have increased flows through their pipelines to avoid the strait.

Despite the recovery in crude oil exports, refined products like diesel remain in short supply due to refinery damage and logistics constraints. Global diesel prices have stayed high, increasing farmers’ costs for fieldwork and transportation. Analysts warn that diesel supply tightness could persist until 2027, prolonging the impact on agricultural costs.

The Hormuz crisis has also severely affected the fertilizer market. Before the conflict, around 39 million tons of fertilizers and feedstocks passed through the strait annually, including 19.2 million tons of urea. The disruption has led to sharp price increases in fertilizers, while grain prices have risen much less, worsening the ratio between farmers’ revenues and input costs.

While the global energy market is adapting to the Hormuz restrictions, agriculture faces more persistent challenges. Higher diesel, freight, and fertilizer costs could continue to pressure production margins and crop yields even after oil flows partially recover.