Oil prices surpass $100 amid Iran conflict, threatening global food costs

LONDON — Global food prices are facing renewed upward pressure as crude oil surged past $100 per barrel this week, marking the highest levels seen since the 2022 Russian invasion of Ukraine.

The price spike follows the outbreak of conflict between U.S.-Israeli forces and Iran on Feb. 28, an event that has effectively paralyzed one of the world’s most critical energy arteries.

The Strait of Hormuz, a narrow waterway through which approximately 20% of the world’s oil supply passes, has seen marine traffic grind to a near halt. Analysts warn that the resulting energy vacuum will ripple through global supply chains, hitting the agricultural sector particularly hard.

Modern food production is deeply tethered to energy costs. Beyond the fuel required to power tractors and transport produce to market, petroleum and natural gas are primary components in the manufacturing of synthetic fertilizers. When energy costs spike, the overhead for farmers rises, inevitably leading to higher prices at the grocery checkout.

The disruption is less about physical barriers and more about the volatile security environment, experts say.

“It’s not a physical blockage — Iran hasn’t built a wall across the sea. It’s all about risk,” Ismayil Jabiyev, a supply chain analyst at CarbonChain, told Al Jazeera.

Jabiyev noted that even if conventional military sites are targeted, the threat of low-cost drone strikes remains a persistent deterrent for commercial shipping. “Cheap drones will always pose a risk... hidden drone launches could continue for months,” he said.

With global supply chains already fragile, the combination of limited oil supply and sustained demand is expected to squeeze both businesses and consumers. For the world’s most vulnerable populations, where food costs represent a significant portion of household income, the energy-driven inflation could signal a burgeoning humanitarian crisis.

GAROWE ONLINE