What could oil above $100 mean for food prices in Europe?

The joint US-Israeli attacks on Iran and Tehran’s response have pushed oil prices higher, with Brent crude often rising above $100. Experts say this will not only affect energy prices but also food prices.

The impact could be particularly strong in Europe, leading to higher food prices and higher living costs.

So, how will the crisis in the Middle East affect food prices across Europe? Which countries are more vulnerable and why?

Experts speaking to Euronews Business indicate that the crisis is expected to raise global food prices by multiple channels.

“In the world, as well as in Europe, food prices are expected to rise due to conflicts due to the interruption of fertilizer and energy supply, as well as the increasing cost of transporting goods,” Zsolt Darvas, senior student of Bruegel, told Euronews Business.

He stressed that a large part of the world’s supply of fertilizers and oil goes through the Strait of Hormuz, which has been closed due to the war.

Higher fertilizer costs directly translate into higher agricultural production costs.

Oil and LNG prices have skyrocketed, and higher fuel costs affect the entire food chain, raising production and shipping costs.

How will the situation change?

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The United Nations Food and Agriculture Organization (FAO) reports that global fertilizer prices are estimated to be 15-20 percent higher in the first half of 2026 if the crisis continues.

Maximo Torero, the chief economist of FAO, noted that the rising costs of fertilizers and energy increase the cost of production for farmers, and the low use of inputs can result in reduced crop yields later in the year, guaranteeing the supply of grains worldwide.

The FAO Food Price Index has started to rise again after a period of relative stability.

“While European natural gas prices have risen by 50-75 percent in the first weeks of the crisis, and high energy costs are increasing costs throughout the agricultural supply chain – including farm operations, irrigation, transport, storage and food supply – these pressures will eventually be transferred to consumer food prices,” Torero told Euronews Business.

The FAO warns that if farmers reduce the use of fertilizers due to high costs, future harvests may decrease, leading to grain shortages and higher food prices later in 2026.

The three main channels that drive food production across Europe

FAO identifies three main transmission mechanisms through which the crisis could drive food price growth in Europe. Torero explained that energy costs are the first point of pressure.

The Persian Gulf is the world’s most important supplier of refined fuels, and disruptions to those supplies have pushed up diesel and jet fuel prices, increasing transportation and logistics costs throughout the food supply.

The high prices of natural gas also directly affect the production of European fertilizers, which was already restricted by high energy costs before the war.

Fertilizer prices exacerbate the problem. Europe is not directly dependent on imports of Gulf fertilizers in large quantities, but there are markets around the world.

When Gulf urea exports were disrupted, prices rose worldwide, and as a result European farmers faced higher import costs.

Because nitrogen fertilizer production is highly dependent on natural gas, rising gas prices in Europe have increased the cost of domestic production, putting double pressure on farmers.

The third channel is the demand for biofuels.

High oil prices increase the profitability of ethanol and biodiesel production, prompting governments and oil refiners to turn to biofuels as alternatives and boosting demand for food crops such as corn, soybean oil and palm oil.

This feedback loop could divert crops from food production, stabilize global grain supplies and raise food prices in Europe even further.

After Russia’s invasion of Ukraine in early 2022, the annual price of food and drink in the EU reached unprecedented levels, rising by more than 19%.

Which European countries are most exposed and why?

The FAO says Gulf refineries will supply 60% of Europe’s jet fuel and 20% of its diesel by 2025.

“This is the clearest evidence of exposure. European countries with large aviation areas and that rely on diesel for transport and agriculture will be particularly affected,” Torero continued.

In terms of refined oil imports, the most exposed countries are the Netherlands, home to Europe’s largest refinery and petrochemical group in Rotterdam, deeply integrated with the Gulf crude and refined product markets, and Belgium, the largest refinery and logistics hub in Antwerp.

Germany, which is the largest consumer of diesel in Europe, is facing a large exposure, as are France, Italy and Spain, which together are responsible for the large demand for aviation, agriculture and industrial diesel demand.

Reliance on natural gas adds additional risk. About a fifth of the world’s LNG production comes from the Gulf and must pass through the Strait of Hormuz.

Italy has long been a major exporter of Qatari LNG, while Spain, France and the Netherlands all have significant LNG import facilities with significant potential for Gulf exporters.

The Netherlands and Belgium, home to Europe’s largest petrochemical groups, face increased risk from any disruption to Gulf-derived naphtha and other petrochemicals.

Other effects will be felt later

Maria Castroviejo, senior analyst at Rabobank, noted that European fertilizer users will probably feel the pain of the fall as they have already been provided for current needs.

“From the fertilizer to the final product, there’s a lot of change going on.” And transportation. Both require energy. All this ends up resulting in high food prices, although we have seen back in 2022 there is a time between the increase in the price of energy and the price of food in the supermarket,” he told Euronews Business.

The general policy of Oxford Economics also expects that the conflict will have a worse effect in Europe than in the US due to the shock of the energy market.

In 2025, the annual cost of food and drink in the EU was 3.3%. It ranged from 0.3% in Cyprus to 7% in Estonia. Turkey is a foreign country, and the price of food increases by 30% every year.