The Iran War Isn’t Just A Gas-Price Story. It’s A Food-Price Crisis
Let’s talk about that bag of lettuce that’s in your fridge.
It most likely had its start in California’s Salinas Valley, grown in soil that was fertilized with nitrogen products derived from natural gas. It was harvested by equipment running on diesel. It was washed, dried, and sealed in a petroleum-based plastic film engineered specifically for breathability. It was loaded onto a refrigerated 40-foot trailer also running on diesel and then driven 2,800 miles across the country to a distribution center in the Northeast, then on to a supermarket near you.
Think of that bag of lettuce, from field to shelf, as a petroleum product. And right now, as you know, petroleum is at war.
The Iran war didn’t just spike gas prices. It put a hidden tax on every salad in America — and on everything else in the grocery cart.
Since the U.S. and Israel began strikes on last month, the Strait of Hormuz — a 21-mile-wide waterway through which roughly one-fifth of global oil and one-third of globally-traded fertilizer flow — has been effectively shut to commercial shipping. The effects that followed are staggering, and they are far from finished rippling through the U.S. food system.
U.S. crude oil prices have risen more than 40% since the war began. The national average price of on-highway diesel hit $4.86 per gallon on March 9 — a jump of nearly 96 cents in a single week, the largest weekly increase since the government began tracking diesel prices in 1994. (The next EIA release is scheduled for Tuesday, March 17.) Brent crude has topped $100 per barrel for the first time since Russia’s invasion of Ukraine.
A second price shock is unfolding and it’s all about fertilizer.
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In the first week of the war, the price of urea — the nitrogen-rich compound that is the foundation of most crop fertilizers — jumped 30% at the import hub of New Orleans, according to the Fertilizer Institute. By mid-March, Fortune was reporting a 35% spike from pre-war levels. Individual spot prices have........
