Iran War Sends US Oil and Gas Prices Higher, Straining Farmers

American farmers are confronting sharply higher operating expenses this spring as the war with Iran keeps oil prices elevated and disrupts fertilizer supplies. Third-generation Iowa soybean grower Alan Montag and ninth-generation North Carolina farmer Charles Harden both report planting-season outlays well above last year’s levels, driven by fuel and input costs that have climbed since US and Israeli strikes began on February 28.

Harden’s operation in Bertie County already faces a 12-inch rainfall deficit for the first five months of 2026, compounding the financial squeeze. He described current conditions as harder than any period in modern US agriculture, noting that his soybeans, corn, peanuts, cucumbers, and cattle herd are all affected by the combination of drought and rising energy prices. Similar reports are surfacing across the Midwest and Southeast, where diesel and natural-gas-derived fertilizers now cost substantially more than they did before the conflict.

Oil markets reflected the lack of immediate progress toward de-escalation. After President Trump’s two-day summit with Chinese leader Xi Jinping in Beijing, Brent crude futures rose 2.4 percent to $108.22 a barrel and West Texas Intermediate gained nearly 2.8 percent to $103.39. Traders cited continued uncertainty over the Strait of Hormuz, even after both leaders agreed the waterway should remain open and free of tolls. Iranian forces have seized at least one vessel and sunk another in recent days, keeping daily transits far below pre-war averages despite Tehran’s claim that roughly thirty ships passed through since Wednesday evening.

Trump described the Beijing talks as productive on several fronts, including Chinese interest in purchasing US oil from Texas, Louisiana, and Alaska. Treasury Secretary Scott Bessent said China would work quietly to help reopen the strait, consistent with its own need for stable energy flows. Yet the absence of a detailed timetable for ending hostilities left markets pricing in prolonged supply tightness. White House officials noted that Xi opposed any militarization of the strait, but no joint plan for enforcement or monitoring was announced.

Administration voices have framed the higher prices as an acceptable trade-off. Fox Business host Larry Kudlow told viewers that $4.50 to $5 gasoline represents “a small price to pay to take out Iran” and to prevent nuclear weapons development, urging Americans to accept the costs until the conflict concludes. He predicted prices would fall once military operations, referred to internally as Project Freedom, achieve their objectives.

For farmers, the timeline matters immediately. Spring planting decisions are locked in, and many operations lack the margins to absorb sustained energy spikes without cutting back on acreage or equipment use. The combination of weather shortfalls and policy-driven energy costs has created a particularly difficult start to the 2026 season, with little clarity on when either pressure might ease.