The oil shock continues to take shape, with a barrel of Brent oil, a reference for Portugal and most European countries, already trading above 85 dollars, 18% more than before the start of the war against Iran (on Saturday).
A pronounced increase in the cost of fuel is expected next Monday, but there is another burden that is gaining in size: the cost of fertilizers, a raw material that will directly affect the production of agricultural goods and animal exploitation.
After the tanker, a food shock also appears to be brewing.
Some of the largest producers of agricultural fertilizers (some derived from raw materials such as nitrogen) are located in the Middle East and a large part of these goods are shipped by sea through the Strait of Hormuz, currently closed (or almost), which is controlled by Iran.
Portugal and many European countries are in bad shape. The price of imported food is likely to soar, several analysts warn.
The Portuguese economy has had weak food sovereignty for decades. According to data from the National Statistics Institute (INE), the country had to import 5.1 billion in agricultural products last year, 8% more than in 2024, according to DN/DV calculations.
In fertilizers, essential for crop productivity, dependence is also enormous and growing: in 2025, Portuguese producers imported 342 million euros in fertilizers, 8% more than in the previous year.
And the problem extends to the meat market, in which Portugal is also highly deficient. It is problematic in that animal husbandry largely depends on feed that is made from various cereals, fats and oils, all materials that depend greatly on fertilizer capacity.
Last year, Portugal imported the equivalent of 2.1 billion euros in meat, a value that reflects a significant annual increase of 22%. The amount spent on live animals purchased from abroad also rose (4%), totaling R$263 million.
Europe in trouble
The team of economists at the Morningstar DBRS rating agency, which follows the agribusiness, is concerned and warns, straight away, that European countries, especially the most agriculturally dependent ones, will be among the most affected in the world with a scenario like this.
If this conflict in the Middle East continues “we could have a significant knock-on impact, with consumers paying the price, as less nitrogen application [um dos principais componentes dos adubos] generally translates into lower agricultural yields and, consequently, higher food prices,” say analysts at DBRS.
“This supply disruption represents an additional headwind for the fertilizer market after China imposed strict rules on urea exports in 2024 to prioritize supply to domestic farmers.”
Worse: “The European Union (EU) exports fertilizers from Belgium and the Netherlands; however, it obtains 15% of the potassium and 11% of the phosphate it needs from Israel and 30% of the nitrogen comes from Egypt.” There is little room for doubt here: “both countries’ exports will likely be significantly negatively affected by the conflict.”
“The EU’s exposure to suppliers from Persian Gulf countries makes it vulnerable to price fluctuations and supply chain constraints” and “shortages of these fertilizer raw materials could lead European farmers to use less fertilizer on crops, which could lead to higher food prices and even food shortages if conflict persists,” they warn.
“The USA, on the other hand, obtains most of its fertilizers internally or from Canada, with only 13% of its phosphate coming from the Middle East”, so “American farmers and consumers are therefore better protected”.
According to the same study, “the fertilizer industry could be materially affected due to the regional interruption in the production and transport of ammonia and nitrogen, essential elements in many fertilizers”, say the same analysts.
Currently, “converging factors will affect the global fertilizer supply chain.”
And why? “Because the Persian Gulf region is home to some of the largest fertilizer factories in the world, and about 25% to 35% of global trade in fertilizer raw materials passes through the Strait of Hormuz.”
“Its closure will therefore stop the transport of ammonia and nitrogen [nitrogénio]which will in turn tend to increase fertilizer production costs and constrain the global nitrogen and phosphate supply chain.”
In this study, signed by five DBRS experts, released this week, they recall that “Israel and Egypt — major suppliers — are affected by the conflict.”
“In addition, Iran itself is the world’s fourth largest exporter of urea (after Russia, Egypt and Saudi Arabia), a product derived from nitrogen and the most widely used fertilizer in the world”, they warn.
Several world agricultural powers, such as Brazil, India or Australia, are already under high stress, say other experts.
“Following attacks on Iranian energy infrastructure, which began in June 2025 and resumed during the current airstrikes, several urea and ammonia production facilities in the country were forced to close or significantly reduce their production. This could further worsen the global nitrogen shortage and increase its price”, add the rating agency’s analysts.
A stairway problem
But evil never comes alone, it comes in stages, as they say.
According to the same study, “nitrogen production depends on the supply of natural gas, therefore, the closure of natural gas plants in the Gulf region will also have a significant impact on the raw material supply chain and respective prices.”
It is recalled that Qatar, one of the largest gas producers in the world, has already closed its largest liquefied natural gas (LNG) factory after a targeted drone attack from Iran.
Thus, “any prolonged interruption in Qatar’s LNG supply could increase the prices of natural gas delivered, consequently increasing the costs of fertilizer production.”
Maria Mosquera, analyst at agricultural consultancy Argus and editor of the specialized magazine Argus Media, highlights that “Qatar Energy (QE) announced that it will stop the production of sulfur, as well as LNG and all associated products”. “QE’s sulfur production capacity is around 3.8 million tonnes per year, and exports to 2025 are expected to total 3.4 million tonnes.” For the expert, this represents the cancellation (for now temporary) of around 8% of global sulfur trade by sea, according to Argus estimates.
Mosquera also adds the danger that this disruption represents for several Asian nations, but also for Brazil and Australia.
“Adnoc, Abu Dhabi’s state-owned oil and chemical company, has set the official sulfur selling price for March in the Indian subcontinent at $530 per tonne.”
“But these prices are already well above last week’s spot price range, estimated at $494-496 per tonne on February 26, before the US and Israeli attack on Iran.”
Furthermore, other observers note that the escalation of the conflict and the effective closure of the Strait of Hormuz have led to an increase in the prices of marine fuel and insurance premiums, as well as delays in the movement of ships or even the interruption of most freight scheduled for the transport of goods.
“Nearly half of global seaborne sulfur exports are on hold and proposed prices for direct delivery markets have increased substantially, with some offers to China, Indonesia and India indicated in the range of $570-600 per tonne.”
As stated, this Thursday, the price of a barrel of oil was stuck at US$85, 18% more than before the conflict with Iran and 31% above the average that the Portuguese government used in the State Budget for this year (US$65.4).
With this jump registered since Saturday, the average price of Brent oil since January 1st is almost 70 dollars, and we are only on Thursday, six days into the war.
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