Iran War Could Push UK Grocery Prices Up by Hundreds as Fertiliser Supply Stalls — Petrol Is Just the Start

British households already stretched by years of cost-of-living pressures now face a second wave of food inflation as the Iran war chokes off a critical but overlooked supply chain: fertiliser.

While headlines have focused on Brent crude settling at £75.34 ($100.46) per barrel on 12 March, the highest since August 2022, the real threat to supermarket bills lies in what else passes through the Strait of Hormuz.

About one-third of globally traded fertiliser transits the narrow waterway, and Qatar's declaration of force majeure on liquefied natural gas exports has knocked out a fifth of global LNG supply, forcing fertiliser plants in India, Bangladesh, and Pakistan to shut down entirely.

The Fertiliser Shock Nobody Is Talking About

The Gulf region produces nearly half the world's urea and 30% of its ammonia, both essential for growing crops. The benchmark price of urea has already jumped to nearly £450 ($600) per tonne from £337 ($450) last week, according to Trading Economics.

'Roughly one-third of global fertiliser trade transits the Strait of Hormuz, including large volumes of nitrogen exports,' Tony Pelli, practice director of supply chain security at BSI Consulting, told CNBC. Fertiliser hub prices in New Orleans have risen from £356 ($475) to £510 ($680) per metric tonne.

Unlike oil, there are no strategic fertiliser reserves. The International Energy Agency released a record 400 million barrels of crude on Wednesday to stabilise markets, but no equivalent stockpile exists for agricultural inputs. Northern Hemisphere farmers heading into spring planting face a supply gap that cannot be bridged in weeks.

Fresh Food Will Be Hit First

The less shelf-stable an item is, the faster prices will rise.

Produce, meat, and dairy are the most vulnerable because retailers cannot stockpile them, Deborah Weinswig, CEO of Coresight Research, told CNN. Packaged goods with longer shelf lives will follow, but the fresh aisles will feel the squeeze within weeks.

Transport costs compound the problem. US diesel hit £3.64 ($4.86) per gallon on 9 March, triggering a 24.75% fuel surcharge on freight shipments the following week, according to the US Energy Information Administration. British consumers will feel this through imported goods, as every product on supermarket shelves arrives by diesel-powered lorry or ship.

Why UK Families Should Pay Attention

The UK imports roughly 40% of its oil and 60% of its gas, though much comes from Norway rather than the Gulf. But food is different. Britain imports a significant share of its fresh produce, fertiliser-dependent grains, and animal feed. A prolonged disruption could add hundreds of pounds to annual grocery bills.

The IEA's March 2026 Oil Market Report confirmed global oil supply plunged by 8 million barrels per day this month, the largest disruption in the agency's five-decade history. Gulf countries have cut total oil production by at least 10 million barrels daily, and without a rapid restart of shipping flows, losses will increase.

No End in Sight

Iran's new Supreme Leader, Mojtaba Khamenei, appointed on 9 March following his father's death, issued his first public statement on Thursday, calling for the Strait of Hormuz to remain closed as 'a tool of pressure.'

The IEA has slashed its 2026 global oil demand growth forecast by 210,000 barrels per day as higher energy costs and a deteriorating economic outlook erode consumption.

For British families, the maths is straightforward. Higher fertiliser costs mean more expensive crops. Higher diesel costs mean pricier transport. And with no sign that the strait will reopen soon, both pressures will land squarely on supermarket receipts.