The Fourth Plate

The escalating conflict between Iran, Israel and the US would likely wreak havoc on global agricultural markets, with attacks on Iran’s gas infrastructure potentially crippling fertilizer production and threatening food security across the Middle East.

US forces struck three Iranian nuclear sites on June 22, marking a dramatic escalation in what began as an Israeli campaign against Iran’s nuclear program. The American strikes targeted facilities at Fordow, Isfahan and Natanz, following Israel’s “Rising Lion” air campaign that had already hit dozens of targets across 18 of Iran’s 31 provinces.

The conflict has reportedly forced Iran to shut down all seven of its major urea and ammonia production plants after Israeli strikes damaged critical natural gas infrastructure. As the world’s third-largest urea exporter, Iran’s potential exit from the market has sent fertilizer prices soaring, with reports stating that other regional producers are raising prices from $402 to $452 per ton.

Rafael Mariano Grossi, Director General of the International Atomic Energy Agency, had earlier warned of potential radiological releases if nuclear sites are attacked.

The crisis extends beyond Iran’s borders. Egypt, another significant fertilizer producer, has apparently halted or reduced production after Israel reduced natural gas flows to the country. With two major suppliers offline and China maintaining tight export restrictions, global fertilizer markets face unprecedented volatility.

Maritime shipping through critical chokepoints has been severely disrupted. Approximately 33% of the world’s traded fertilizer volume passes through the Strait of Hormuz, which Iran has threatened to close in response to US strikes. Meanwhile, attacks by Iran-backed Houthi rebels have caused vessel traffic through the Red Sea to plummet by 75%, forcing ships into longer routes around Africa.

The economic toll has been severe. Israel’s daily military expenses are averaging $725 million, with estimates suggesting a month-long war could cost around $12 billion. Over 5,000 Israelis have been evacuated from their homes, while engineers estimate missile strike damage will exceed $400 million.

For Iran, the impact has been catastrophic. By late June, Israeli strikes had killed at least 950 people, including 263 civilians, and wounded over 2,000 more, according to human rights groups. The country’s agricultural sector, which contributes 12.8% to GDP, faces severe disruption at a critical time, with rice planting operations underway in key producing regions of Gilan and Mazandaran.

The conflict threatens to push already fragile populations toward famine. The UN reports that 66.1 million people in the Arab region faced hunger in 2023, with 186.5 million experiencing moderate or severe food insecurity. Palestine, Yemen, and Syria have been identified as hunger “hotspots” of very high concern.

The environmental impact has been equally severe. Military operations are generating substantial greenhouse gas emissions, with global military activities responsible for approximately 5.5% of worldwide emissions. The destruction of water treatment facilities and agricultural infrastructure threatens long-term environmental stability in a region already stressed by climate change.

Oil markets have reacted strongly to the conflict, with Brent crude prices spiking by over 10% in the initial phase. The direct entry of the United States into the war pushed prices higher still, with crude surging more than 3% to a five-month high.

The conflict occurs against a backdrop of existing water scarcity in Iran, where dam storage capacity reached just 44% in January 2025. Six dams have less than 10% water storage, while Tehran’s key dams supplying drinking water have dropped to their lowest levels on record at just 5% capacity.

Gulf Cooperation Council countries, which import up to 85% of their food, are particularly vulnerable to supply chain disruptions. However, they have accelerated food security investments in response to growing regional instability, with government initiatives including public-private partnerships and support for agricultural technology innovation.

The war has transformed energy infrastructure into both a target and a weapon. Iran partially halted production at the South Pars gas field, which produces around 610 million cubic meters of natural gas daily and constitutes approximately 80% of Iran’s total gas output. Israel has closed two of its three offshore natural gas fields, reducing domestic supply by nearly two-thirds.

Analysts warn that a complete shutdown of Iranian oil exports would remove approximately 4% of the global oil supply, potentially pushing Brent crude prices to $90 per barrel and shaving 0.2 percentage points off global GDP growth. A “severe shock” scenario involving the closure of the Strait of Hormuz could drive oil prices as high as $130-$150 per barrel, potentially reducing global GDP by nearly $1 trillion annually.

The conflict has evolved from a regional military confrontation into a systemic crisis threatening global food security, energy markets, and environmental stability. With no clear path to de-escalation, the humanitarian and economic consequences continue to multiply, creating cascading effects far beyond the immediate theater of war.