Middle East War Is Hitting Your Wallet Hard

The Middle East conflict is no longer just a headline. It is showing up in your fuel bill, your grocery receipt, and your monthly energy statement. And experts warn the worst may still be ahead.

The crisis has already been described as the largest disruption to the global energy supply since the 1970s oil crises.1 What started as a military conflict has quickly turned into an economic shock that is being felt by ordinary families around the world.

How the Strait of Hormuz Became the World’s Pressure Point

One narrow waterway is at the center of this storm.

Around 20% of global oil and a similar share of LNG normally transit the Strait of Hormuz, a key shipping lane on Iran’s southern border.2 When that route gets disrupted, the whole world pays the price.

Tanker traffic dropped by approximately 70%, with over 150 ships anchoring outside the strait to avoid risks.1 Soon afterwards traffic dropped to about zero, affecting about 20% of the world’s daily oil supply and significant volumes of liquefied natural gas.1

The conflict has already led to the suspension of about a fifth of global crude and natural gas supply. A near-complete shutdown of the strait means the region’s top oil producers, including Saudi Arabia, UAE, Iraq and Kuwait, have had to suspend shipments of as much as 140 million barrels of oil, equal to about 1.4 days of global demand, to global refiners.3

That is not a minor logistics hiccup. That is a seismic shift in global supply.

Middle East war impact on global oil and food prices 2026

Oil Prices Are Rewriting Records

The numbers from the energy markets are staggering.

Brent crude oil prices surpassed $100 per barrel on 8 March 2026 for the first time in four years, rising to $126 per barrel at its peak.1

Dubai crude oil prices surpassed $166 a barrel to a new record high.4 Because of its proximity to the conflict, traders are looking at Dubai’s price as a potential harbinger of what could be ahead for other crude benchmarks if the situation does not improve.4

The scale of the price surge is historic. From February 28 to March 27, Brent crude went up from $72.48 to $112.57, reflecting a 55.32% increase.5

Analysts are no longer dismissing the extreme scenarios either. Wood Mackenzie analysts said that Brent could soon hit $150 and that $200 was not “outside the realms of possibility” in 2026.6

“The market is shifting from pricing pure geopolitical risk to grappling with tangible operational disruption, as refinery shutdowns and export constraints begin to impair crude processing and regional supply flows,” JP Morgan analysts said.3

Your Food Bill Is the Next Casualty

It is not just petrol stations where the pain is registering. The supermarket aisle is the next frontline.

Rising energy costs fueled by Middle East tensions have pushed global food commodity prices higher for the second month in a row, according to data from the UN’s Food and Agriculture Organisation, with the FAO benchmark index rising to 1% above its level a year ago.7

Global food prices rose in March, driven by higher energy prices and an increase in freight costs linked to war in the Middle East. The FAO food commodity price index averaged 128.5 points in March, up 3 points from February.8

The fertilizer crisis is a major part of this story and one that most people are not yet watching closely enough.

Up to 30% of internationally traded fertilizers normally transit the Strait of Hormuz. Unlike oil, the fertilizer sector does not have internationally coordinated strategic reserves, making supply disruptions more difficult to manage. In early March, Middle East granular urea prices rose by nearly 20% compared to late February levels.1

Natural gas accounts for up to 80% of nitrogen fertilizer production costs. The surge in gas prices has automatically led to a rise in fertilizer prices, with the price of granular urea rising by 37% to $665 per ton since the start of the conflict.9

This is not just about what is on shelves today. It is about what farmers can grow tomorrow.

“The main issue we have right now is actually the impact of the conflict on energy and on fertilisers. The cost of producing the next harvest, not the food we have today, but the food we need tomorrow,” said David Laborde, director of FAO agrifood economics.7

Analysts warn that if the conflict continues, global food prices could rise 15 to 20% in the first half of 2026, marking a significant inflationary shock.10

The FAO commodity tracker in March told a very specific story:

• Wheat rose by more than 4%
• Vegetable oil climbed by 5%
• Sugar surged by 7%

Who Gets Hit the Hardest

Not everyone feels this pain equally. Geography and income level determine how bad it gets.

The shock is global, yet asymmetric. Energy importers are more exposed than exporters, and poorer countries face more strain than richer ones.11

India, with thinner reserves and a heavy reliance on Middle Eastern crude, is more vulnerable to a prolonged disruption. Higher energy prices are feeding inflation, weakening the rupee and threatening growth.12

More than 80% of oil and LNG shipped through the strait in 2024 went to Asian markets, with China, India, Japan and South Korea the primary destinations.12

Low-income countries are especially at risk of food insecurity, and some may need more external support, even as such assistance has been declining.11

The humanitarian numbers are alarming. WFP analysis indicates that an additional 45 million people could be pushed into acute hunger due to rising food and fuel costs and supply chain disruptions, pushing the global total to a record 363 million people.13

Closer to home, in the second week of March, California’s gasoline prices exceeded $5 per gallon due to the United States’ conflict with Iran.1 On March 31, gas prices hit $4 per gallon nationally, as the war with Iran caused a surge of 30% in gas prices.5

What Governments and Markets Are Doing About It

The policy response has been fast, but it is not yet enough to fully calm the markets.

OPEC+ pledged to increase oil output by 206,000 barrels per day to mitigate shortages.1

French President Emmanuel Macron announced that France and several other states are setting up a “purely defensive” escort mission for merchant ships transiting the strait, sending a dozen ships to the wider Middle East.1

Dozens of countries attended a virtual meeting on fully reopening the Strait of Hormuz, as US President Donald Trump called on allies to unblock the waterway.14

The airline industry has also been severely tested. Before the conflict, the global airline industry had forecast record profits of $41 billion for 2026. But with the price of jet fuel more than doubling, carriers are under pressure, with airlines from Air New Zealand to Vietnam Airlines cutting flights.14

What markets and experts say will happen next:

• Strategic reserve releases from major economies can temporarily calm oil prices
• Fertilizer costs will remain elevated well into the next harvest cycle even after the conflict ends
• When the war ends, gas will be the first prices to start coming down, within two to three weeks, economic strategists say15
• If elevated energy and food prices persist, they will fuel inflation worldwide. Historically, sustained oil price spikes have pushed inflation higher and growth lower, with higher transport and input costs working their way into the prices of manufactured goods and services11

Although the war could shape the global economy in different ways, all roads lead to higher prices and slower growth.11 The people who will feel that most are not sitting in boardrooms or trading floors. They are at the fuel pump, in the supermarket, and at the end of the month staring at their utility bill. The conflict in the Middle East has reminded the world that in an interconnected economy, no one is truly insulated from the fire. What happens next at the Strait of Hormuz will not just determine geopolitical outcomes. It will determine what billions of families pay for everyday life.

What do you think about how governments are handling the economic fallout of this conflict? Share your thoughts in the comments below.