NASHVILLE, TENN. (RFD NEWS) — Coverage continues on the growing economic fallout from the conflict involving Iran, as the war now approaches the three-month mark and volatility spreads well beyond global energy markets.
Analysts say the continued disruption in the Strait of Hormuz is affecting everything from fuel and fertilizer prices to grocery costs and agricultural inputs across the United States.
Patrick De Haan with GasBuddy says the impact of the conflict has become increasingly widespread as millions of barrels of oil remain blocked from global markets each day.
“It’s blocking millions of barrels of oil on a daily basis and having vast impacts on other products like base motor oils — of course, the prices of diesel, jet fuel, and gasoline are all spiking,” De Haan says. “Americans are very reliant on various forms of oil for energy, and so it’s having a vast impact across the board, from gas prices to diesel to jet fuel to the price Americans pay when they go to the grocery store.”
DeHaan says even after the conflict ends, rebuilding global oil inventories and strategic reserves may take years.
“Fully pre-war levels may take a very long period of time as global oil inventories and, specifically, U.S. strategic reserves, as well as Japanese and other strategic reserves, become depleted,” De Haan continues. “For every day that the Strait remains closed, it may take roughly a week to catch up.”
He estimates it could take as long as 80 weeks for global inventories to fully recover, warning that every additional day the Strait remains closed extends the timeline.
The supply disruptions are also beginning to affect motor oils and lubricants used in agricultural equipment and machinery. DeHaan says many specialty base oils originate from facilities in the Middle East, which are now affected by shipping restrictions and supply disruptions tied to the blockade.
“You’re still going to be able to find motor oil, it just is likely to be impacted by the price,” he explains. “Of course, because of what’s happened with the Strait of Hormuz.”
De Hann says farmers preparing for maintenance work should be aware that both prices and availability could become more challenging in the months ahead.
Analysts Caution Against Reactionary Risk Management
Agricultural traders continue to closely monitor the economic ripple effects of the conflict across commodity and input markets.
Market analyst Brady Huck says volatility tied to geopolitical headlines is unlikely to disappear anytime soon, warning producers against making marketing decisions based solely on short-term headlines or political developments.
“I don’t anticipate that to go away in a dramatic fashion overnight,” Huck explains. “I think that’s just the world we live in right now. If you get caught marketing and positioning yourself relative to those tweets, they may not age very well because they can change very much the next day.”
He says maintaining a strong risk management plan remains critical given the uncertainty facing agriculture and commodity markets.
Policy Efforts Grow As Fuel & Fertilizer Prices Climb
Fertilizer markets have also seen major swings since the conflict began. According to DTN, all eight major fertilizer prices increased over the past month, though none rose by more than 5 percent.
Over the last year, however, anhydrous ammonia prices have surged 45 percent, while urea prices are up 37 percent.
USDA recently announced plans to accelerate permitting for a new ammonia plant in Louisiana, expected to cost more than $3 billion upon completion.
But Josh Linville with StoneX says fertilizer policy discussions are overlooking key nutrient concerns, particularly around urea supplies.
Linville says reopening the Strait of Hormuz could put pressure on urea prices in the short term, but tight supplies may continue to support elevated fertilizer prices into the next planting season.
Meanwhile, Sen. Chuck Grassley (R-IA) says he is working with other farm-state senators on multiple bipartisan bills to address fertilizer costs and improve market transparency.
“As a farmer-lawmaker, I’m proud to serve as an outspoken advocate for family farmers,” Grassley said in a recent press release. “When there’s a natural disaster or headwinds in the farm economy, I raise the volume for Rural America at the policymaking tables.”
The proposals include the Fertilizer Research Act, which would direct USDA to study competition and concentration in fertilizer markets, and the Fertilizer Transparency Act, which would require USDA to publish weekly fertilizer pricing data for key nutrients, including nitrogen, phosphorus, and potassium.
Grassley is also backing the Lowering Input Costs for American Farmers Act, which would eliminate tariffs and countervailing duties on phosphate fertilizer imports from Morocco.
“I’m glad President Trump uses his bully pulpit to bring attention to fertilizer prices,” Grassley continues. “At the Senate Agriculture Committee hearing, I repeated my calls to remove the Biden Phosphate Duties on phosphate fertilizer imports from Morocco. The duties have contributed to inflated fertilizer expenses, particularly for corn growers. A Texas A&M study showed farmers paid nearly $7 billion in additional costs between the 2021-2025 growing seasons because of countervailing duties. That’s unsustainable, particularly when commodity prices are low, fuel prices are climbing, and interest expenses are eating into farmers’ bottom lines.”
In addition to fertilizer legislation, Grassley says he remains focused on passing nationwide year-round E15 legislation.
He noted that President Donald Trump, Vice President JD Vance, and Agriculture Secretary Brooke Rollins have all publicly endorsed expanded E15 sales, which supporters say could strengthen corn demand and lower fuel costs for consumers.
