Middle East Conflict Disrupts Global Agriculture: Aid Packages and Ongoing Concerns

The ongoing conflict in the Middle East, stemming from joint military strikes by the United States and Israel on Iran beginning February 28, 2026, is creating significant challenges for the agricultural sector, particularly in Spain. The near-closure of the Strait of Hormuz, a critical waterway for global energy and goods transport, has led to increased fuel prices and supply chain disruptions, impacting farmers and ranchers.

Strait of Hormuz Closure and Fuel Price Increases

Iran’s actions to restrict passage through the Strait of Hormuz, in response to the attacks, have caused a surge in oil prices. As of March 16, 2026, Brent crude was trading at $105.70 per barrel, a more than 40% increase since the start of the conflict [Al Jazeera]. This price hike is particularly concerning during the spring fertilization season, adding to the operational costs for farmers.

Government Response and Aid Packages

In response to these challenges, the Spanish government approved a royal decree on March 20, 2026, containing 80 measures to address rising costs in key sectors, including agriculture and transportation. The decree includes:

• Agricultural Diesel Aid: A 20 cents per liter subsidy on agricultural diesel, calculated based on 2025 consumption and applicable from March 22 to June 30.
• Fertilizer Aid: Direct aid of 22 euros per hectare for dry land and 55 euros per hectare for irrigated land, capped at 300 hectares per farm.
• Financing Line: A 300 million euro financing line through ICO credits guaranteed by the State.

Agricultural Associations’ Concerns

While agricultural associations have welcomed the aid, they express concerns about its sufficiency. COAG (Confederación de Organizaciones Agrarias y Ganaderas) estimates that the increased costs for the sector exceed 1.05 billion euros annually, driven by rising prices of diesel, fertilizers, and agricultural plastics [COAG]. Asaja (Agrarian Association of Young Farmers) believes the aid will only be effective if the international situation resolves quickly, warning that the problem is structural in nature.

Specific Concerns: Agricultural Plastics and Beekeepers

COAG has highlighted two major deficiencies in the royal decree: the exclusion of agricultural plastics and the lack of specific measures for beekeepers. The organization estimates that approximately 36,000 beekeeping families and sectors reliant on plastics, such as horticulture and fruit growing, will be left without coverage.

COAG is requesting a specific aid line of at least 45 million euros for agricultural plastics, channeled through cooperatives and justified by purchase invoices. They also argue that the diesel aid mechanism excludes beekeepers who use diesel A for transporting hives, impacting approximately 3.2 million hives across 36,000 bee farms registered in REGA.

Impact on Sectors and Global Trade

The disruption to shipping through the Strait of Hormuz is impacting global supply chains, forcing vessels to divert to alternative routes, including the Red Sea. Saudi Arabia’s Red Sea port of Jeddah is bracing for increased business as a result [CNN]. However, securing the passage of essential imports, particularly food, remains a critical concern, as the region imports about 85% of its food supply.

Looking Ahead

The situation remains fluid and dependent on the resolution of the conflict in the Middle East. Continued disruptions to the Strait of Hormuz will likely exacerbate the challenges faced by the agricultural sector, requiring ongoing government support and adaptation strategies to mitigate the economic impact. The effectiveness of the current aid packages will be contingent on the duration of the crisis and the ability to address the specific needs of all affected agricultural segments.