STRAIT OF HORMUZ — The United States and Iran reached a deal on April 17, 2026, to completely reopen the Strait of Hormuz for the duration of their ceasefire. The two countries have not yet negotiated a permanent peace agreement.

The Strait of Hormuz had been closed for more than a month during the conflict. The closure reduced worldwide energy production and increased prices of gasoline, diesel, fertilizer, plastics, and other commodities. The energy shock from the Iran conflict is larger than the shock caused by the Russian invasion of Ukraine.

Many oil and gas shipments that departed the Strait of Hormuz at the start of the conflict have only recently arrived at their destination ports.

According to the Producer Price Index, Stage 1 food supply chain prices were 6.2 percent higher in March 2026 than in March 2025, and 2.4 percent higher than in February 2026. The Producer Price Index data was collected on March 10, 2026. According to the Consumer Price Index, food prices in March 2026 were no higher than in February 2026.

Many food producers are operating under contracts based on energy prices set before the war began. Most diesel used for food transportation by trains and trucks is sold under contracts that were priced before the conflict began. Intermediaries in the food supply chain, including manufacturers, are absorbing some increased energy costs in the short term. Retailers are hesitant to change food prices because of competition.

Increased energy prices affect manufacturing, transportation, and packaging processes in the food sector, particularly for energy-intensive materials like plastics and foams. Crop-specific production shocks typically allow consumers to substitute between commodities, but an energy shock affects the entire food economy without such substitutes. None of the Middle Eastern countries involved in the conflict are large food exporters.

In North America, farmers generally purchased fertilizer for the 2026 crop before the war began. If the conflict continues into the 2027 crop year, fertilizer cost increases are likely to compound food inflation. Historically, food price increases under shock conditions rise slowly and are slow to decline afterward, often plateauing instead of dropping. Producers and retailers are risk-averse and tend to avoid being the first to reduce prices or decrease supply to avoid potential losses.

Ken Foster is an agricultural economist at Purdue University. He studies food supply chain economics and energy price effects on agriculture.