As of the eighth week of the U.S.-Israeli war on Iran and the Trans-Jordan, economic shocks are hitting worldwide. The impact is made worse by pre-existing locations of economic breakdown resulting from a number of known factors, including the current war economy push in the trans-Atlantic, decades of anti-tech “green” policies, and the now tottering, predatory finance and trade system of the West. Experts emphasize that the impact felt to date is nothing compared to what will happen shortly, because there were still significant amounts of oil and other supplies on ships in transit when the war began, as well as stockpiles in some countries, and those are now running out.
The following are a few indicative updates on the shock waves that have just begun to hit.
World Food Production Falling—Grains
The volume of production of staple grains (wheat, corn, rice) can be seen as a metric of food sufficiency overall, and as of now, the global volume is projected to decline in the next crop cycle, directly from the combined effects of lack of adequate fertilization, fuel, and other necessities for agriculture. A worldwide decline of 2%in the crop season 2026-2027 for “total grains” (wheat, corn and some others) is projected in the monthly “World Market Report” issued April 23 by the International Grains Council, based in London, and operating since 1949. The understated IGC report explained, “Concerns about fertilizer affordability and application decisions have added to uncertainties about the 2026-2027 cropping outlook, including parts of the Southern Hemisphere, where upcoming requirements may not be covered.”
David Laborde, Director of FAO’s Agrifood Economics Division warned on April 13, “We are in an input crisis; we don’t want to make it a catastrophe. The difference depends on the actions we take,” said Laborde. That was 10 days ago. The FAO has prepared “a crop calendar-based prioritization of countries based on when and how much fertilizer they need,” declared FAO Chief Economist Maximo Torero. Laborde calls for nations to reconsider—he says “ponder”—switching to biofuels in this emergency.
Cut Fertilizer, Cut Food
Prices are rising, supplies are falling for all essential chemicals for plant life: nitrogen, phosphorus, potassium, and sulphur. In a recent year, about 115 million metric tons of some type of nitrogenous fertilizer was applied worldwide, but as of now, it will be significantly less. Some 25% of nitrogenous fertilizer has been dependent directly and indirectly on transit through the Strait of Hormuz, now blockaded.
China, the biggest user of nitrogen fertilizer at the level of about 27 million metric tons (mmt), is taking strong contingency measures. The next largest user, India, at 21 mmt, is under severe pressure, with normally 20-30% of its urea coming from the Gulf region. The nation is using a combination of imports—whose costs are running 90% higher than pre-Iran war, and as much domestic production as possible. This is restricted since natural gas imports are running below 70% of pre-conflict volume. Urea production is down by dozens of thousands of tons. India’s fertilizer reserve is currently cushioning the shock, but will be depleted.
In the United States, the next largest user, at 12 mmt annually, farmers are facing impossible price rises, and regional shortages. The situation in many other countries is dire. Moreover, some of the leading grain exporting nations face extreme problems.
Argentina, which ranks among the top ten wheat exporters in the world, has urea prices up 100% over the past two months, going from $500 to $1,000 a ton. Now, at wheat planting time, many farmers are considering not putting in a crop at all. In recent times, Argentina imported half of its fertilizer—all types, and of urea (granular), 60% came from three Gulf nations and Turkmenistan. Brazil, the world agriculture power house, has a severe fertilizer crisis.
Africa, with many nations dependent on imports of fertilizer for more than 85% of usage, smallholder farmers have no options, as prices spike and supplies shut down. They face a food crisis this year. The FAO estimates, for example, that a 10% reduction in fertilizer application in Sub-Saharan Africa will result in up to 25% less rice, corn and wheat there, with devastating human consequences.
Ethiopia, which has worked to increase irrigated farmland, has an extreme fertilizer supply crisis. With up to 90% of its fertilizer recently connected to the Gulf state producers, prices have surged nearly 70%, and shortages have hit during the belg planting season (February to May, usually rainy). The positive future is shown by the planned new urea fertilizer production complex to be built in Gode, Ethiopia, by the Dangote Group, matching its one already operating in Nigeria.
World Fuel Shortages, Price Hikes
In recent times, 20 to 30% of petroleum, crude oil, and liquefied natural gas transited the Strait of Hormuz, now blockaded. Waves of price hikes and shortages of the various types of end products are underway, from petroleum, to jet fuel—about 9% of all liquid fuel consumed worldwide, to gasoline (petrol), diesel, LPG (liquefied petroleum gas, for cooking, heating, and vehicles), natural gas, and so on. The effect is severe everywhere, but dramatic in the European Union, which has already cut its oil and gas imports from Russia, and shut down many of its coal and nuclear plants under various false eco- and other pretexts. Since Feb. 28, the cost of gas-fueled electricity has gone up more than 50% in the EU.
Slovenia was the first EU nation to ration petrol to individual users, at 50 liters a day, as of late March.
Diesel Prices Soar
In the United States the average price of a gallon of diesel is up about 45% since Feb. 28, straining the truck-dependent transportation system, and farmers as well. The price of gasoline is up some 35% during the two months. Some gas stations are running out of fuel. Refineries geared to one or the other—diesel or gas—cannot switch back and forth. After China, the United States ranks as the second largest oil importer in the world, supplied by Canada, Mexico, Saudi Arabia, and some others.
In India, the world’s third largest oil importer, trucks haul nearly 70% of the country’s freight. The government has so far shielded truckers from price hikes, but this may end, pending elections this month, and meantime there has been informal rationing among truckers. An estimated 10% of trucks are out of service, and that could climb fast.
In Europe, truckers have staged protest demonstrations in Ireland, the U.K., France, Germany, and Italy, against the rising diesel prices, which have exceeded 33% in two months.
Across Africa, there are extreme repercussions on prices and supply of diesel and on other products from the shutdown of transit through the Hormuz Strait. In South Africa, which imports 70% of its fuel, there are widespread outages at gas stations, as well as price hikes.
Jet Fuel Shortage
Air carriers the world over are taking extreme measures because of the shortage of jet fuel, including cutting thousands of flights, adding per-flight surcharges, raising ticket prices, and other measures. Australia and Asia saw cutbacks starting weeks ago, now European carriers have announced major cutbacks. For example, the Lufthansa Group has cancelled 20,000 flights affecting six of its top European hubs, beginning in May, continuing over the summer. United Airlines, the U.S. carrier, announced ticket price increases of 15% to 20% for the summer months.
Ethiopian Airlines, the largest carrier in Africa, has so far used a variety of means in the face of the jet fuel supply and price crisis, but faces making cancellations as other airlines are doing. Ethiopian Airlines utilized stopovers to get fuel, freed fuel because of cancelling its flights from airspace closures in multiple Southwest Asia, made use of some reserves, and other tactics.
Manufacturing Hard Hit
Industry everywhere is reeling from the supply shock of oil, gas and petrochemicals resulting from the Strait of Hormuz blockade. Aluminum smelting and any other energy-intensive processing is hit hard, as well as, for example, glass production, heavily dependent on using natural gas to run the glass furnaces continuously. For example, the reductions of operations just in two months, from India to South America, has resulted already in shortages of glass containers of all kinds, from pharmaceutical vials to beer bottles.
In addition to the energy shock, the sudden shortage of chemical feedstocks, for example naphtha, has caused waves of shutdown of other goods, from plastics to paint to cleaning agents. It is estimated that all Asia’s petrochemical sector has relied on the Gulf states for more than half its imports of naphtha.
Gulf state aluminum smelting—located there in recent decades for reasons of cheap energy, has come to account for 10% of world output, but now is drastically limited. For example, Aluminum Bahrain cut production by nearly 20%.
China is the world’s largest importer of petrochemical feedstocks, with about half of its imports coming from the Gulf states. Government and commercial firms are faced with emergency contingency planning.
India likewise has been over 45% reliant on imports of petrochemical intermediate products, with a great deal coming from the Gulf states, now blocked.
Germany—Dramatic Collapse
The collapse process in Germany, once the leading industrial and exporting nation of Europe, is dramatic. Every sector of industry, from steel to electronics, to vehicle manufacturing, to chemicals has been contracting for some time, as the energy prices and other conditions worsened, in large measure due to the September 2022 sabotage of the Nord Stream pipelines. Famous name companies, e.g. BASF, Bayer, and others, are moving sub-units of operations to China and elsewhere. In this context, the impact of the Hormuz Strait blockade cannot be “absorbed.” The recent announcements of drastic job cuts are emblematic of the crisis situation. In March, Volkswagen announced 50,000 layoffs in Germany.
Trans-Atlantic Campaign for ‘War Economy’
Presented as geopolitical necessity, the Trump Administration and certain capitals and leaders in Europe are beating the drum for shifting economies to military production, also asserting this will increase productive capacity. President Trump demands a $1.5 trillion military budget for 2027, and has stressed explicitly that the federal government must pursue military output, off-loading other budget responsibilities onto states, such as health care for the elderly and poor (Medicare and Medicaid), and child daycare. He calls for crash production of new “Trump-class” battleships for a “Golden Fleet,” and military hardware for a “Golden Dome” missile shield over the United States.
In parallel, the war faction in Europe is making similar demands. In Germany, for example, Volkswagen is promoting manufacturing jeeps, in the former auto assembly works at Osnabrück, and also courting Israel for a contract to supply components of its Iron Dome.
Never mind that it is a delusion that these moves would result in raising productivity throughout the economy, as Trump claims.
UN: Iran War Has Pushed 32 Million People Into Poverty
The U.S.-Israeli war on Iran has already wiped out 0.5 to 0.8% of global GDP and pushed more than 32 million people back into poverty worldwide, UN Development Program Administrator Alexander De Croo warned on April 23. “Things that take decades to build up, it takes eight weeks of war to destroy them,” the former Belgian prime minister told Reuters.
De Croo singled out fertilizer shortages, which have been worsened by the disruption of shipping through the Strait of Hormuz during planting season, as a crisis with consequences that have not yet fully arrived. “Food insecurity will be at its peak level in a few months, and there is not much that you can do about it,” he said. Agricultural productivity has already fallen, and crop yields later this year will reflect the damage. The $100 billion per year in remittances, flowing to the Asia-Pacific region from family members working in Southwest Asia, is drying up.
The damage is irreversible in the near term. “Even if the war would stop tomorrow, those effects, you already have them,” De Croo said. A UNDP policy brief published April 13 found that countries in the Gulf, Asia, Sub-Saharan Africa, and small island developing states are most vulnerable. Iran alone has lost an estimated year-and-a-half of human development progress in the first month of the conflict. And humanitarian agencies are overwhelmed: “We will have to say to certain people … we can’t help you,” De Croo said.
U.S. Plans Additional Cuts to International Food, Medical Aid
President Trump’s proposed 2027 federal budget, released during the time of the current war on Iran, calls for drastic cuts in U.S. foreign food relief and health care aid, at the same time that multi-millions of people internationally are being thrown into desperation. In recent decades, the share of U.S. donations to the World Food Program and other relief channels was significant, and now it is to be nearly eliminated. The Trump plan is to terminate the Food for Peace program (begun in 1954 under President Eisenhower), and reduce the McGovern-Dole Food for Education program (2002) by $240 million. These cuts in aid come on top of others already being implemented in the 2026 fiscal year. Washington has reduced both contributions to UN humanitarian aid agencies—e.g., the World Health Organization, and direct donations of disaster relief, food, water, fertilizer and other aid. Although the notorious U.S. use of aid programs for subversion and destabilization of other nations is reprehensible, the actual volume of donated product—foodstuffs, fertilizers, medicines, equipment—made a difference in the past to many places of need, and its absence means suffering and death. The White House argues that foreign aid is against American values.
UN Global Hunger Update Identifies 10 ‘Conflict-Hit’ Nations
On April 24, an alliance of UN agencies released the “Global Report on Food Crises” mapping details of the world picture of acute hunger, in which, as reported by UN News, “266 million people across 47 countries experienced high levels of acute food insecurity in 2025….Ten countries—Afghanistan, Bangladesh, the Democratic Republic of the Congo, Myanmar, Nigeria, Pakistan, South Sudan, Sudan, Syrian Arab Republic, and Yemen—accounted for two-thirds of all people facing high levels of acute hunger.” Famine was confirmed in 2025 in Gaza and parts of Sudan.
The report identifies that on the immediate, regional level, “Conflict remains the primary driver, accounting for more than half of all people facing severe hunger.” But now, with the global economic shocks from the U.S.-Israeli warfare, the resulting worldwide economic breakdown, unless stopped, will cause unprecedented suffering and death.
