In a world that claims to be more local than it used to be... nothing has changed, at least not enough, for a war in the Middle East not to result in a rise in food prices that Spaniards buy at the supermarket. And this is despite the fact that it never rains but it pours. In the last decade, four major crises have occurred, not including the current one, all pushing towards bringing productions closer and being less dependent on external sources. In 2018, it was Chinese steel and the US attempt to limit the export tsunami (they control over 50% of the global supply). Europe was the most affected in that sandwich between Washington and Beijing. Two years later, the pandemic hit. In 2022, Russia started the war in Ukraine, which is the mirror where hundreds of reports are analyzing the closure of the Strait of Hormuz and its impact on oil and gas prices (spoiler: we are not doing so bad, comparatively). And, in April of last year, Donald Trump's Liberation Day turned the trade board upside down, with the imposition of tariffs. Today, ten months later, the US and Israel have ignited the dormant conflict in the Middle East.
It's not just about oil - although that too. The Persian Gulf is one of the largest producers and exporters of fertilizers or the raw materials needed to manufacture them, and Spanish agriculture and livestock are among those affected. They are the first link in the 'from farm to table' chain that is already feeling the impact with reduced supply margins and soaring prices. The sector, which claims not to have yet passed on the increase in its costs to the final consumer, almost takes for granted that it will eventually reach the shelves of major food retailers.
"I just bought fertilizers for the next two years," confessed a horticultural farmer from Extremadura who, as his main profession, is an investment director at a major Spanish firm. He is an example of the pulse of Spanish agriculture in the face of the closure of the Strait of Hormuz.
After urgently meeting with the government and the initial measures taken last Friday by the Council of Ministers, farmers and livestock breeders are focusing their demands on two aspects: they consider the increase in agricultural diesel unjustified, which had skyrocketed by 40% just one week after the outbreak of the war, and they request specific subsidies. COAG (Coordinator of Farmers and Livestock Breeders) estimates that, after the first week of war, the agricultural surcharge would amount to 2.4 million euros per day for the entire sector (around 890 million euros per year) just due to the rise in diesel. Asaja raises the bill to 2.7 million euros daily.
But let's go back to the beginning. This journey of prices starts in the Middle East. In the last five years, the countries of the Persian Gulf have exported nitrogen fertilizers worth 50 billion dollars. But the closure of the Strait of Hormuz "is also putting at risk the supply of low-cost urea. It is estimated that 45% of global trade" is concentrated there, according to Singular Bank. What is urea? It is considered one of the most important nitrogen fertilizers for agriculture to nourish the soil and improve crops. This commodity is trading in the futures market with increases of over 37% in the first 20 days of the conflict, reaching highs from 2022, above 660 dollars per ton.
The British firm Barclays believes that 30 products from the region are going through critical times. 62% of limestone comes from there (used for smelting in the metallurgical industry mainly); 47% of sulfur; or polyethylene, used in the manufacture of plastics, packaging, or pipes, which could lead to the disruption of supply chains. In Spain, prices of plastics used in greenhouses are already increasing.
Iran is the fourth largest exporter of urea in the world, behind Russia, Egypt, and Saudi Arabia. "The attacks on Iranian infrastructure since June 2025 have cut or significantly reduced its production" and could worsen, according to Morningstar, because everything is interconnected. To produce urea, which depends on nitrogen, natural gas is needed, and its plants in the Persian Gulf are also experiencing cuts, with prices continuing to rise. The TTF, Dutch natural gas used as a reference in Europe, has surged by 60% to around 50 euros per MWh. "We are far from the Ukraine scenario [when levels exceeded 350 euros per MWh], but it has a significant impact because it is important to remember that gas prices were already double the usual price before the war. Now we are at 30 euros, when prior to the Ukraine crisis it was 15," recalls Manuel Velázquez, from the consulting firm ERA Group, whose job is to monitor the prices of raw materials to help companies manage their stocks. Velázquez warns of price increases also in "ammonia and ammoniacal phosphates, which also come 30% from the Middle East." They are used for the manufacture of urea and other nitrates. In addition, the European Union, as a whole, imports 15% of potassium and 11% of phosphates from Israel and another 30% of nitrogen from Egypt, which are also facing supply issues.
"Only 20% of all global production of phosphate fertilizers comes from Ma'aden," a Saudi Arabian company, which is the largest raw material manufacturer in the region, points out Oliver Wyman in a recent report to clients, where it details the problems facing the world's main commodities. Qatar, for example, was forced to close its largest urea producer after a drone attack. Other factories producing methanol, crucial for the industry; polyethylene affecting automotive or construction; early-stage aluminum, and many more are also affected. "China has ruled out exports to ensure domestic supply. India is seeking alternative sources; Egypt, another major fertilizer producer, is having trouble obtaining gas from Israel; and Morocco is facing complications in the supply of sulfuric acid, necessary to attack phosphate rock and produce phosphate fertilizers," explains Paloma Pérez, general secretary of the National Association of Fertilizer Manufacturers (Anffe), to understand the complexity of the global trade map. These interruptions "will benefit North American and Russian producers, increasing their market share while prices continue to rise," says Morningstar. 17% of global urea exports are from Russia.
"Even in the favorable case that the conflict ends, we do not know what happened to the region's productive capacity, and the supply cannot be immediately restored, nor the passage through the Strait of Hormuz," recalls Raymond Torres, director of Coyuntura at Funcas. And there's more. The prices of maritime trade freight have risen, as have the costs of insurance to cover the potential risks of cargo ships. And it's all a chain that reaches the final consumer.
Spain not only cannot import from Gulf countries, but the fertilizers bought from other states will also be more expensive because the supply is lower - according to the basic economic theory - and because their production depends on gas, oil, or other raw materials that have also seen their prices rise. Crude oil, in its different versions, is also used in the agri-food industry and directly for heating livestock or operating tractors.
On the other side of the table, Anffe acknowledges that, for now, it is too early to talk about a rise in food prices, but "if the conflict is not resolved soon," they do not rule out the closure of some plants as already happened in 2022. Funcas believes that if the war lasts "a couple of weeks more, European consumers, and therefore, Spanish consumers will start to feel it now that they are much more aware of the concept of inflation than during the Ukraine war," which led the ECB to the largest interest rate hike in its history - both in speed and magnitude.
Another increase today only further diminishes the purchasing power of Spaniards. Since the outbreak of the pandemic, food and non-alcoholic beverages prices have increased the most. A 39% increase in five years. Behind them are restaurants and financial services, or housing, water, electricity, and gas (all in the same subsector) with a 27% increase, according to the INE.
"We are facing high food inflation, 6.5% in fresh products, and this only adds more pressure to European citizens," Torres points out. Eggs are almost like gold now... it's the product that has increased the most in a year, by 30%. Beef is 16% more expensive, sheep meat almost 10% more; fresh legumes and vegetables, 7%, and fruits, another 5% in just the last year. Blessed shopping basket.