As of the third month of the U.S.-Israeli war on Iran and the Trans-Jordan, economic shocks are gathering force worldwide. What reserves had existed of fuel, fertilizer, chemicals, and essential components are diminished in many parts of the world. What supplies of oil and gas happened to be at sea, are now delivered. Stockpiles of foodstuffs are depleting. Planting has proceeded without sufficient fertilizer, or in too many locations, cancelled.
Worse, the blockage of the Strait of Hormuz is fast becoming a “global embargo.” For example, on April 24, the United States declared sanctions on the Hengli Petrochemical Refinery, the giant coastal complex in Dalian City, northeast China, for receiving oil from Iran. The United States maintains a reign of terror in the Caribbean Sea. In the Baltic and North Seas Basins, a grouping of 14 nations has formed, for the purpose of intervening into shipping, claiming threats from Russia. Black Sea shipping remains dangerous. The United States and Japan are making claims about the South China Sea.
At the UN Security Council open debate on April 27, on the topic “The Safety and Protection of Waterways in the Maritime Domain,” attended by dozens of nations, U.S. Ambassador Mike Waltz, in the spirit of a global embargo, called on nations to join the U.S.-led Coalition for Navigation Freedom, meaning to participate in more geopolitical economic warfare. The U.S. proposed “Maritime Freedom Construct,” circulated privately to other nations on April 28, is focused on the Strait of Hormuz and Gulf of Oman, but is premised on unilateral world control.
These shocks come on top of pre-existing situations of economic crises and challenges. China is the outstanding exception, where Beijing has made contingency provisions. In the West, decades of “green” anti-technology policies have undercut economic productivity. At the same time, the tottering, predatory casino financial system is now in a breakdown phase, shown by the crypto madness, and debt explosion.
After Putting Out the Fires, What Do You Cultivate?
The current world snapshot makes dramatically clear that even if all warfare and blockades suddenly end—which should be the immediate goal—economic production cannot automatically be “switched back on.” We need emergency planning, deliberation, and creativity now for a new world architecture for international relations based on mutual economic benefit and security.
Jason Ross, science advisor to The LaRouche Organization, addressed how to think about this in a recent article titled “The Apple Orchard and the Physics of Civilization,” referring to the economic principles of Gottfried Wilhelm Leibniz (1646-1716) and Lyndon LaRouche (1922-2019):
When you stop burning the apple orchard, you do not get your apples back. The fire’s cessation is not the fruit’s return. Somewhere between those two events lies the patient, continuous, generation-long work of planting, cultivating, pruning, waiting—without which there is no orchard at all, only ashes and the memory of what once was.
This is the reality the Anglo-American elite is refusing to understand as it surveys the damage its war on Iran has done to the fabric of the world. The fertilizer not applied this Spring cannot be retroactively applied; the crops not planted this season cannot be retroactively harvested; Iran’s loss of eighteen months of human development progress in eight weeks of war is not an event that has ended but a deficit that continues to compound. The 32 million people newly impoverished by the Iran war, a reported Pentagon estimate that Hormuz mines could take six months to clear after the fighting stops—all of this describes damage that is still unfolding from causes already set in motion.
Nearly 350 years ago, aboard a ship in the Thames estuary awaiting passage to Holland, Gottfried Wilhelm Leibniz took up this problem in its deepest form. His dialogue Pacidius to Philalethes—a work ostensibly on the nature of motion—arrived at an astonishing conclusion: that a body in motion does not sustain itself by its own momentum but must be, at every instant, sustained in existence by a creative cause that is itself never at rest. Leibniz called this “transcreation.” What looks like a continuous motion is in fact a continuous re-making; what looks like persistence is in fact the product of an ongoing act of creation. A universe abandoned to its own devices would not coast; it would fail to be. Existence is not inertial.
Translate this from metaphysics to economy and one arrives at a principle Lyndon LaRouche developed across his lifetime: Human civilization is not a thing that persists on its own. It is the product of a continuous creative contribution—scientific discovery, infrastructure, the raising and education of new generations, the cultivation of the productive powers of labor—without which it decays. What seems “stable” is in fact being built, at every moment, by someone. When the creative work stops, civilization slides back. And when destructive work is added to the cessation of creative work, the decline is not linear but compound. The damage now entered in the ledger does not freeze in place when the war ends; it continues to unfold from causes already in motion, and compounds with every moment of continued creative neglect….
The choice is not between war and peace in some abstract sense. It is between two different physics of civilization. One recognizes that what we have is built at every moment by creative contribution and will decay without it; the other treats the inheritance of centuries as a fund that can be drawn down indefinitely, as if the work of sustaining it had ended long ago. The first physics is the one Leibniz described and LaRouche advanced for economics. The second is the physics of every imperial decline.
Once we put out the fires, what shall we cultivate?
World Food Production Falling—Grains
The following is a review of economic impacts from the U.S.-Israeli warfare, worsening by the day, which updates our April 25 article, “Economic Shocks Hit Worldwide.” 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 (IGC), 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.”
Cut fertilizer, cut food. Prices are rising, supplies are falling for all essential chemicals for plant growth: 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. Beijing has restricted all major fertilizer exports as of March, to safeguard domestic supplies.
The next largest user of nitrogenous fertilizers, 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. For example, a state of emergency was declared April 17 by the governor of Montana, in order to loosen trucking regulations to help speed scarce fertilizer to the fields.
The situation in many 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. Import-dependent for 85-90% of its supplies, its domestic production was allowed to stagnate in recent years. The current government is working to change this, but it takes time.
In Africa, with many nations dependent on more than 85% of fertilizer usage from imports, 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.
In Southeast Asia, many countries are slammed by the fertilizer supply and price crisis, affecting crops—and exports—from pineapples to palm oil. The agricultural achievement of Indonesia is at stake. Jakarta announced national rice self-sufficiency last year, a great success for the fourth most populous nation in the world. But what happens in the coming crop seasons? Jakarta agriculture authorities are confident they have fertilizer reserves enough for the next growing season, but they rightly seek an early resolution to the world turmoil.
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 various types of end products are underway, from petroleum, to jet fuel—about 9% of all liquid fuel consumed worldwide, including 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 ecological and other pretexts. Since Feb. 28, the cost of gas-fueled electricity has gone up more than 50% in the EU.
Many Asian nations issued work-at-home orders as of March. Some locations switched to four workdays from five, to cut fuel use in transport. Daily caps on fuel use are also now common. 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 UK, 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 in March; 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. The U.S. carrier United Airlines announced ticket price increases of 15% to 20% for the Summer months.
Ethiopian Airlines, the largest carrier in Africa, in the face of the jet fuel crisis, has so far used a variety of means to minimize cancellations, such as utilizing stopovers to get fuel, making use of some reserves, and other tactics. Fuel has also been conserved because of flight cancellations due to airspace closures in multiple Southwest Asian countries.
Manufacturing Hard Hit
Industry everywhere is reeling from the supply cuts of oil, gas and petrochemicals resulting from the Strait of Hormuz blockade. Aluminum smelting and any other energy-intensive processing is hit especially hard, as well as, for example, glass production, heavily dependent on using natural gas to run the glass furnaces continuously. For example, the reduction of operations in just 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 of 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%. Estimates are there will be a 2026 international supply deficit of up to four million metric tons of aluminum this year.
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.
Dramatic Collapse in Europe
The nations of the 27 member states of the European Union are experiencing severe dislocations from the Persian Gulf U.S.-Israeli warfare, because of the stagnation and decline already underway in the EU. It is worth a brief look at this negative context, in which the new economic shocks are hitting. To begin with, total electricity generation in the EU was 2,800-2,900 TWh in 2015, falling over a decade to 2,700-2,770 TWh in 2024/2025.
Over the three-year period, 2023-2025, German industry fell 7-8% in output. Italy lost 4-5% of industrial output. France declined by 1-2%. The takedown of reliable electricity—except in France—and geopolitical turn to high-priced gas and oil, is an underlying factor for economic decline. Investment in Europe’s chemical sector fell by over 80% in 2025, with plant closures doubling, and capacity shrinking significantly. EU steel production is now 10-15% lower than in the pre-2022 period.
Germany. Formerly the “locomotive” of the EU economy, Germany is now in extreme decline. In the once legendary, thriving auto sector, massive layoffs are underway. In 2025, 50,000 jobs were cut. Then this year, Volkswagen alone announced 50,000 job cuts so far. In chemicals, the world-leader BASF has announced a permanent downsizing in its Ludwigshafen site, cutting thousands of jobs and shifting production to China and the United States.
These few facts are indicative of the downsizing across all manufacturing sectors in Europe, from electronics, to glass-making, which have 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. Besides BASF, many famous name companies, e.g. Bayer, are moving sub-units of operations to China and elsewhere. In this context, the impact of the Hormuz Strait blockade cannot be “absorbed” in Europe.
Trans-Atlantic Campaign for ‘War Economy’
Presented as geopolitical necessity, the U.S. President Donald 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, Chancellor Friedrich Merz has called for restricting state pensions to “basic coverage,” not to maintain living standards, in order to fund rearmament goals. Corporations are falling into line. 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.
Cuts in humanitarian aid. The Trump 2027 proposed budget, prioritizing warfare, 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 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 products—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: 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 (UNDP) 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.
Further UN and private aid agencies document the scale of the suffering. 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.”
Contingency Plans for Emergency Relief, Peacetime Rebuilding
Experts in various specialties are working on emergency relief and longer-term rebuilding plans, despite the geopolitical deadlock. Most urgently, the International Maritime Organization (IMO) has an evacuation plan ready for the 20,000 seamen trapped on the 2,000 vessels detained in the Persian Gulf. They are short of food, water and sanitation. Further, the IMO has an established traffic separation scheme, a maritime corridor, that can be activated at any time, to restore transit through the Strait of Hormuz. It has functioned since 1968, jointly operated by Oman and Iran. IMO Secretary-General Arsenio Dominguez briefed the UN Security Council on this April 27.
To lessen the food production crisis, the Rome-based UN Food and Agriculture Organization (FAO) has on stand-by “a crop calendar-based prioritization of countries based on when and how much fertilizer they need.” This was reported by FAO Chief Economist Maximo Torrero on April 13. David Laborde, director of FAO’s Agrifood Economics Division, warned at the same time, “We are in an input crisis; we don’t want to make it a catastrophe. The difference depends on the actions we take.” He appealed in particular, for nations to reconsider—he says “ponder”—switching to biofuels in this emergency. However, this trend is occurring, of diverting food crops for fuel, as many nations see no alternative.
On March 27, the United Nations announced the creation of a Task Force to facilitate the flow of commodities, because “it is urgent to prevent a massive humanitarian crisis in the Middle East and beyond including in Africa and Asia import-dependent on fertilizers.” This was described in a statement by the head of the new Task Force Jorge Moreira da Silva, deputy UN secretary-general and executive director of UN Operations Project Services. Participating agencies include the IMP, UN Trade and Development (UNCTAD), and others.
On April 21, Moreira da Silva said the Task Force had put everything into place so that if there is a political agreement among nations, his team has a “one-stop platform” for approving and monitoring shipping through the Strait of Hormuz, and “in seven days we’ll get the people on the ground ready to do this kind of facilitation.”
Calling for the “political will,” he warned, “The disruption of the Strait of Hormuz can push 45 million more people into hunger and starvation.”
