Energy Disruptions and El Niño Threaten Global Food Security
A new S&P Global analysis highlights growing concerns over global food security due to rising energy costs, fertilizer shortages, and the impact of El Niño. The report emphasizes how disruptions in oil and LNG flows through the Strait of Hormuz are affecting key agricultural inputs like urea, sulfur, and ammonia—essential for fertilizers used worldwide. South Asia is particularly vulnerable as it relies heavily on Gulf imports for these materials. The analysis also points to a severe diesel shortage impacting farm operations globally. Middle Eastern and Russian diesel exports have plummeted due to conflict and policy changes, while China has restricted diesel and jet fuel exports. This scarcity has driven up the price differential between crude oil and diesel to over $100 per barrel—far above historical norms—and is increasing operating costs for farmers. The combined effects of energy disruption and El Niño weather patterns are creating a perfect storm that could lead to reduced crop yields, higher food prices, and potential global food shortages.
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Topics: El Niño impact fertilizer shortages food crisis fuel costs Strait of Hormuz