Geopolitical Conflict in Iran Drives Up Energy and Fertilizer Costs for U.S. Farmers

2026-07-12

The BareStory

Ongoing conflict in Iran and disruptions in the Strait of Hormuz are driving up energy and fertilizer costs, placing significant financial pressure on American agricultural businesses. The Strait of Hormuz, a critical maritime passage, handles approximately 20% of the world's oil, nearly half of global urea exports—a key nitrogen fertilizer—and one-fifth of global liquefied natural gas daily.

In Louisiana, agricultural pilot Reed Keahey reported that the price of kerosene-based Jet-A fuel rose from $2.46 per gallon in February, before the war began, to a peak of $4.11 in May. Keahey stated that purchasing 7,500 gallons of fuel at the peak price cost him more than $30,000. Farmers David and Theresa Guererro reported that surging urea prices exceeded their fertilizer budget by approximately $120,000 to $130,000, leaving the survival of their farm highly uncertain. These individual challenges occur amid a broader national trend, with the American Farm Bureau Federation reporting that U.S. farm bankruptcies increased by 46% last year compared to 2024.

Economists Stephen Moore and EJ Antoni argued that the conflict with Iran highlights the necessity of expanding domestic energy production to achieve "energy dominance." White House spokeswoman Taylor Rogers stated that President Donald Trump's energy agenda has lowered prices and benefited American businesses by unleashing reliable energy. The White House has maintained that increasing domestic oil and natural gas production will shield consumers from geopolitical price shocks. This strategy comes as the U.S. reached a record oil production of 21.1 million barrels a day in 2025, according to the Energy Institute's 2026 Statistical Review of World Energy.

Left Perspective

Expose Volatile Fossil Dependence
Protect Vulnerable Food Producers
Mitigate Destructive Domestic Extraction

Right Perspective

Unleash Domestic Energy Production
Champion Market-Driven Cost Relief
Deter Adversaries Through Strength

Left Perspective

• Expose Volatile Fossil Dependence The vulnerability of American agricultural businesses to disruptions in the Strait of Hormuz proves that tying domestic food security to global fossil fuel supply chains is a systemic failure. When a pilot like Reed Keahey faces a spike in Jet-A fuel from $2.46 to $4.11 per gallon, it exposes the inherent instability of non-renewable energy markets. True economic resilience cannot be achieved by doubling down on volatile commodities, but rather by transitioning away from the geopolitical choke points that dictate the survival of local farmers.

• Protect Vulnerable Food Producers The primary focus of economic policy must be the preservation of independent family farms, which are currently bearing the brunt of international conflict. The fact that David and Theresa Guererro exceeded their fertilizer budget by up to $130,000 demonstrates how corporate-dominated, energy-intensive inputs leave small-scale producers entirely defenseless. Without targeted intervention and a shift toward sustainable, localized agricultural practices, the system will continue to favor industrial monopolization while driving family operations into bankruptcy.

• Mitigate Destructive Domestic Extraction Pivoting toward "energy dominance" via record-breaking extraction, such as the U.S. reaching 21.1 million barrels of oil a day in 2025, represents a dangerous ecological gamble. This short-sighted strategy ignores the long-term environmental costs of fossil fuel reliance under the guise of temporary price stabilization. Relying on increased drilling as a shield against global conflicts only delays the necessary structural shift toward renewable energy, leaving the agricultural sector permanently exposed to both climate chaos and geopolitical instability.

Right Perspective

• Unleash Domestic Energy Production National security and economic survival depend on achieving total energy independence to insulate domestic markets from foreign adversaries. The fact that the Strait of Hormuz controls 20% of global oil and nearly half of global urea exports means the U.S. must maximize its own natural resources to neutralize these geopolitical choke points. Prioritizing domestic drilling directly shields American businesses from international blackmail and ensures that vital sectors like agriculture can access affordable fuel and fertilizer.

• Champion Market-Driven Cost Relief The dramatic rise in U.S. farm bankruptcies by 46% highlights the urgent need to lower operational overhead through increased supply rather than government intervention. Economists Stephen Moore and EJ Antoni rightly identify "energy dominance" as the most effective mechanism to drive down input costs for struggling operations. By pushing U.S. oil production to a record 21.1 million barrels a day, the market is supplied with the raw materials needed to lower prices for kerosene, diesel, and nitrogen-based fertilizers.

• Deter Adversaries Through Strength Allowing hostile foreign regimes to dictate the price of essential commodities like fertilizer and fuel threatens the foundational stability of the American economy. A strong, self-reliant energy sector acts as a powerful geopolitical deterrent, ensuring that conflicts in regions like Iran do not trigger domestic crises. Failing to aggressively expand domestic fossil fuel and petrochemical infrastructure leaves the nation’s critical food supply chain dangerously dependent on unstable maritime passages and foreign goodwill.

How it may affect me

As a U.S. reader:

• You may face higher grocery costs or food supply instability as American farmers struggle to afford critical, energy-intensive inputs like fuel and nitrogen-based fertilizer.

• Your local agricultural community could experience economic decline and job losses due to a rising wave of farm bankruptcies.

• You could see changes in national energy policies, such as increased domestic oil and natural gas drilling, aimed at shielding the domestic market from foreign supply chain disruptions.

Geopolitical Conflict in Iran Drives Up Energy and Fertilizer Costs for U.S. Farmers

The BareStory

Left Perspective

Right Perspective

How it may affect me

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