Iran War Spikes US Gas, Diesel and Fertilizer Prices, Squeezing Farmers and Small Businesses

The conflict with Iran that began in late February has now stretched into its third month, driving up global energy and fertilizer prices in ways that are beginning to squeeze American small businesses and promise higher costs for everyday consumers. Farms and trucking operations, which form the backbone of food production and distribution, are absorbing the first blows from disrupted oil markets and closed shipping lanes, according to industry reports and surveys compiled from multiple outlets.

The joint U.S.-Israeli military campaign initially aimed at neutralizing Iranian nuclear facilities and proxy threats has instead produced a sustained squeeze on energy supplies. Iran’s continued influence over the Strait of Hormuz, through which roughly one-fifth of global oil trade and up to a third of the international fertilizer market passes, has kept prices elevated even as fighting continues. President Trump, who once anticipated a resolution within weeks, stated this week that he has no fixed timetable for ending operations. Negotiations remain stalled.

The most immediate effect appears at the fuel pump. U.S. gasoline prices have climbed to about four dollars a gallon, roughly a dollar higher than before the strikes began. Diesel, critical for tractors, combines, and long-haul trucks, has followed a similar trajectory. A Reuters/Ipsos poll conducted this month found that 77 percent of registered voters hold the president at least partly responsible for the increase, including 55 percent of Republicans, 82 percent of independents, and 95 percent of Democrats. Fifty-eight percent of respondents said they would be less likely to support congressional candidates who back the administration’s approach to the Iran conflict, a finding that arrives six months before midterm elections in which Republicans hope to hold their House majority.

Yet the numbers that may matter most for household budgets come from the agricultural sector. Synthetic nitrogen fertilizer, derived from natural gas, is essential to roughly half of all global food production. Gulf producers supply much of the raw material and finished product, and the closure of key routes through the Strait of Hormuz has produced sharp price spikes. The American Farm Bureau Federation reported that 70 percent of farmers surveyed cannot afford all the fertilizer they need for the current growing season. Independent analyses suggest the added expense is already increasing the cost of producing corn by about 35 dollars per acre. With planting underway across the Northern Hemisphere, reduced application rates this year point toward lower yields and, eventually, higher grocery bills.

Trucking firms face parallel pressure. Higher diesel costs raise the expense of moving everything from grain to packaged goods. These increases seldom stay with the carrier. As one industry observer noted, the added costs typically pass through the supply chain until they reach the final buyer. Small businesses lack the financial buffers of larger corporations, making them more likely to trim routes, delay purchases, or raise prices sooner.

Military analysts in Jerusalem and Washington are already cataloging tactical lessons from what some are calling the 40-day war. Precision strikes, drone defenses, and intelligence coordination have demonstrated both strengths and remaining vulnerabilities in modern arsenals. Initial U.S. and Israeli operations in June 2025 and the current campaign have not, despite early claims, fully destroyed Iran’s capacity to produce nuclear material or ballistic missiles. The fighting also occurs against the backdrop of Israel’s earlier campaign in Gaza, which concluded in October 2025 with a fragile cease-fire. These strategic assessments, however, offer little comfort to a Midwest farmer staring at fertilizer invoices or a trucker calculating fuel margins.

The New Republic and other outlets have highlighted a deeper structural vulnerability. American agriculture’s heavy reliance on natural-gas-derived fertilizers ties domestic food production to distant geopolitical events. Proposals for alternatives, such as expanded use of precision application techniques, cover crops, or domestic production incentives, have circulated for years. Yet market signals and entrenched corporate interests have slowed widespread adoption. Whether the current price shock accelerates change remains uncertain.

For now, the pain is concrete. Poorer nations will likely face the most severe food shortages, but American consumers will not escape entirely. Higher input costs for farmers and transporters tend to translate into elevated prices for bread, meat, packaged foods, and other staples. Small businesses, which employ the majority of American workers, often absorb these shocks by reducing hires, postponing investments, or simply operating with thinner margins.

The conflict has already claimed thousands of lives and damaged regional infrastructure, including oil export facilities. Its economic consequences are now reaching American fields and highways. As the war grinds on without a clear exit, the question facing policymakers is how long the domestic economy can absorb these pressures before broader adjustments become unavoidable. Farmers and truckers, who have little say in foreign policy, are nevertheless paying a direct price for decisions made thousands of miles away. Consumers, in turn, will encounter that price at the checkout counter.