The Gulf may have calmed, but Europe’s farmers are still paying the price

The headlines may have moved on from the Gulf, but Europe’s farmers cannot.

The interim memorandum of understanding signed by Washington and Tehran in June briefly eased fears of a prolonged disruption in the Strait of Hormuz, triggering a fall in oil prices and calming global commodity markets. 

Yet only weeks later, renewed attacks on commercial shipping and fresh US-Iran tensions have shown how fragile that relief really was. The agreement has reduced the immediate risk of a full-scale energy shock, but it has not restored confidence in one of the world’s most critical trade corridors. 

For Europe’s agri-food sector, that distinction matters.

Even when diplomacy lowers geopolitical tensions, supply chains do not recover overnight. The Strait of Hormuz remains a vital artery for fertilisers, ammonia, urea, sulphur and other agricultural inputs on which European food production depends. Shipping delays, higher insurance costs and logistical bottlenecks continue to ripple through the market long after oil prices have retreated.

Fertiliser prices follow ships, not headlines

Financial markets can price in peace within hours. Fertiliser markets cannot.

Large bulk cargoes ordered during the height of the crisis are still moving through global supply chains, meaning distributors across Europe continue to sell inventories purchased when transport costs and geopolitical risk premiums were significantly higher. 

Analysts continue to warn that fertiliser availability and prices will take months—not weeks—to normalise fully, even if maritime traffic stabilises. 

That leaves farmers facing a familiar problem. The geopolitical crisis may have eased, but this season’s production costs remain elevated.

The mismatch is becoming increasingly apparent. Commodity markets respond to expectations. Agriculture operates on planting seasons, procurement contracts and biological cycles that cannot simply be accelerated by diplomatic breakthroughs.

Europe’s food producers remain under pressure

The pressure extends well beyond fertilisers.

Across the European Union, farmers are grappling with weaker commodity prices, rising production costs and continued uncertainty over export markets. Producers of cereals, livestock, olive oil, dairy and horticultural products are all operating in an environment where margins remain exceptionally tight.

At the same time, climate volatility, volatile input prices and increasingly fragmented global trade are making long-term planning more difficult than at any point in recent years.

Trade is becoming more predictable, but not necessarily easier

The improving outlook for EU-US trade offers some welcome stability.

Following the implementation of the latest EU-US trade agreement, tariffs on a broad range of American industrial goods have been removed while market access has expanded for selected agricultural products. The agreement signals that Brussels and Washington are moving away from tariff escalation and back towards managed cooperation.

Yet for European agriculture, this is only part of the picture.

Trade barriers may be falling across the Atlantic, but geopolitical uncertainty in the Gulf continues to influence the cost of producing food inside Europe. Lower tariffs cannot immediately offset higher fertiliser bills.

Strategic autonomy starts in the field

The past month has reinforced an uncomfortable lesson.

Europe’s food security depends not only on what happens inside the Common Agricultural Policy, but also on events thousands of kilometres away in shipping lanes, energy markets and geopolitical flashpoints.

The temporary easing of tensions in the Gulf offers some breathing space. It does not remove the structural vulnerabilities that the crisis exposed.

For policymakers, supporting Europe’s farmers will require more than emergency aid whenever geopolitical shocks occur. It will require building greater resilience into fertiliser supply chains, reducing strategic dependencies and strengthening Europe’s capacity to absorb future disruptions.