(The Wall Street Journal, Francisco Martin-Rayo, March 25, 2026)
The war in Iran is affecting not only oil and gas but also the global food supply through two simultaneous shocks: the effective closure of the Strait of Hormuz from February 28, which interrupted the flow of fertilizers from the Gulf to the world, and the Iranian missile attack on March 18 on the industrial city of Ras Laffan in Qatar, which blocked LNG production destined for fertilizer manufacturing.
About 50% of the urea traded worldwide, a nitrogen fertilizer that supports nearly half of global food production, comes from the Gulf and passes through the strait; QAFCO alone in Qatar produces 5.6 million tons per year, equal to 14% of the global supply, and has been offline since March, while Russia and China have already limited exports, causing the price of urea to soar from $516 to $680 per ton in less than a week, with forecasts above $800 if the blockade continues until May.
The timing is dramatic because many farmers worldwide, from Australia to India, Italy, and Brazil, have only 15% of the fertilizer needed just weeks before planting, creating not only a price problem but also a physical availability issue that will lead to a 12-18% increase in global food prices by the end of 2026 and even higher in the first half of 2027, with the risk of export restrictions by various countries as already happened in 2022.
Francisco Martin-Rayo on the two simultaneous shocks.
“The war in Iran is limiting the supply not only of oil and gas but also of food. Two shocks have hit the global food system after the American and Israeli attacks against Iran. The first is the effective closure of the Strait of Hormuz from February 28. The second is the Iranian missile attack on March 18 on Ras Laffan in Qatar. In both cases, the media focused on oil prices. This reading is dangerously incomplete.”
Francisco Martin-Rayo on the impact on urea.
“About 50% of the urea traded worldwide, the nitrogen fertilizer that supports nearly half of global food production, comes from the Gulf and passes through the strait. QAFCO in Qatar is the single largest urea producer in the world, with 5.6 million tons per year, equal to 14% of global supply. QAFCO’s production has been halted since March 4.”
Francisco Martin-Rayo on the consequences for farmers.
“A grain farmer in Australia, a country that imports 70% of its urea from the Gulf, has access to only 15% of what he needs, with planting just weeks away and no alternative source. The same conversation, in different languages and on different crops, is repeating from Punjab in India to the Po Valley in Italy and the Cerrado in Brazil.”
Francisco Martin-Rayo on food price forecasts.
“Assuming it will take at least six months to return to normal traffic through the Strait of Hormuz, our baseline forecast indicates that global food prices will rise 12-18% above pre-crisis levels by the end of 2026 and even higher in the first half of 2027 before stabilization is possible.”
Francisco Martin-Rayo on the risk of export restrictions.
“When a different supply shock caused food prices to soar in 2022, Serbia, Hungary, India, Indonesia, and Argentina all limited key food exports within months of each other. Conditions are ripe for this to happen again in 2026: price signals are stronger, political pressure is greater, and governments have learned that export restrictions work as a short-term tool even if they are economically destructive in the long term.”
(Excerpt from the newsletter by Giuseppe Liturri)
