Lula warns Iran conflict is driving up global fuel and food costs

Tuesday 22 September 2026 - 17:21

By: Azzat Manal

Lula warns Iran conflict is driving up global fuel and food costs

Brazilian President Luiz Inácio Lula da Silva has warned that the conflict involving Iran is creating wider economic repercussions, pushing up the cost of fuel, fertilizers and food in markets around the world. Speaking to CNN, Lula said the disruption was being felt far beyond the Middle East, with consumers and producers facing higher costs as energy and agricultural supply chains come under pressure.

Lula argued that the military confrontation has created a shock for the global economy, particularly through its impact on energy supplies and maritime trade. He said Brazil was seeking to shield its domestic economy from the effects of the conflict, stressing that the country did not want disruptions linked to the Middle East to translate into higher costs for Brazilian households and businesses.

The Strait of Hormuz has become a central factor in the economic fallout. The strategic waterway is one of the world's most important energy transit routes, with roughly one-fifth of global oil and liquefied natural gas trade passing through it under normal conditions. Since the outbreak of the conflict, shipping activity through the strait has fallen sharply, disrupting the movement of energy supplies and increasing uncertainty in international markets.

The disruption has also affected fertilizer markets, an important concern for Brazil because of the country's dependence on imported agricultural inputs. Brazil's Finance Ministry has warned that the Middle East conflict and export restrictions have contributed to significant increases in fertilizer prices, particularly for nitrogen and phosphate products. The government has been examining measures designed to limit the impact of the international shock on domestic production and consumers.

Higher energy costs can also feed into food prices through transportation, agricultural machinery and other stages of the supply chain. Recent market data have shown particularly strong pressure on diesel prices, with higher fuel costs increasing expenses for farmers, freight operators and other businesses involved in food distribution.

For Brazil, the fertilizer issue is especially sensitive because agriculture plays a major role in the country's economy and exports. The government has sought to expand domestic fertilizer production while using fiscal measures and other policies to reduce the impact of international price shocks. Brazil's dependence on overseas suppliers means that prolonged disruptions in global trade can have consequences for planting costs and agricultural output.

Lula's comments come as international efforts continue to address the economic consequences of the conflict. Oil prices have remained highly volatile, with developments surrounding the Strait of Hormuz, regional supply disruptions and prospects for renewed diplomacy between Washington and Tehran influencing market expectations. Reuters reported this week that oil prices eased after reports that Iran could consider reopening the waterway under certain conditions.

The Brazilian president's warning highlights how a conflict centered in the Middle East can quickly spread economic pressure across continents. For countries that rely heavily on imported energy or agricultural inputs, prolonged disruptions to shipping routes could continue to affect production costs, inflation and household prices even when the conflict itself remains geographically distant.