IMF Managing Director, Kristalina Georgieva, don raise alarm say the ongoing Middle East war don cause serious shock to the global economy. She talk am last week as she dey deliver speech ahead of IMF-World Bank Spring Meetings. Georgieva yarn say the conflict don disrupt oil and gas supply, damage critical infrastructure, and increase uncertainty for global trade and transport routes. “My heart goes out to all people affected by this war and all wars,” she talk with emotion.
She explain say key energy hubs for Gulf don suffer serious damage. Qatar Ras Laffan complex, wey be one major LNG facility, don take direct hits since March. Georgieva reveal say the plant don dey shut since March 2, and e fit take 3 to 5 years to restore to full capacity. Ras Laffan na producer of 93 percent of Gulf LNG, with about 80 percent dey go Asia-Pacific region. That region now dey face serious fuel shortages.
The IMF chief describe the situation as “classic negative supply shock.” She warn say countries go face slower economic growth even if peace return. Over 80 percent of countries wey dey import oil go suffer from rising energy costs and external imbalances. Georgieva caution policymakers against unilateral measures like export restrictions or price controls. She talk say such steps fit make global instability worse.
Meanwhile, US President Donald Trump don announce say US Navy go begin blockade ships wey dey enter or exit Iranian ports from April 13. The announcement come hours after US-Iran talks for Islamabad collapse without agreement. Trump talk say Iran fail to follow through on promises to reopen Strait of Hormuz and remain unwilling to abandon nuclear enrichment.
The blockade no mean complete shutdown of Strait of Hormuz. US Central Command talk say e go apply only to ships wey dey travel to or from Iranian ports for Gulf and Gulf of Oman. Tankers and cargo vessels wey dey go Saudi Arabia, UAE, Kuwait, Iraq, and Qatar still go fit pass through the waterway. But shipping companies and insurers dey avoid areas wey get risk of military interception. War risk premiums don hit shipping.
Strait of Hormuz na one of world most critical shipping routes. About 20 percent of global oil and LNG exports normally pass through the narrow channel. Shipping lanes for each direction na only around 3km wide for their narrowest point. In practical terms, blockade mean US Navy go try stop maritime traffic linked to Iran instead of physically block the entire strait.
The operation go rely on warships, patrol aircraft, drones, satellite tracking, and intelligence to identify vessels wey dey head to or depart from Iranian ports. Ships fit be warned, ordered to turn back, boarded, diverted, or inspected. US Fifth Fleet, wey dey based for Bahrain, already maintain large naval presence for Gulf.
Iran don talk say dem go view any enforcement action near the strait as act of war. Iranian officials warn say dem fit interfere with wider shipping, deploy naval mines, harass US warships, or try tighten their own control over the route. Under international law, naval blockades generally dey treated as acts of war unless UN authorize am or justify as self-defence.
Trump talk for Truth Social say Iran “knowingly failed” to reopen the waterway, wey he describe as international passage vital to global trade. He add say US forces go interdict vessels wey don pay tolls to Iran and begin clear mines wey dem believe Iran don place for the waterway. “No one who pays an illegal toll will have safe passage on the high seas,” he talk.
Oil markets don already react. Brent crude rise above $100 per barrel after collapse of Islamabad talks and Trump blockade threat. The effect go dey felt most immediately for physical oil market. Saudi Arabia, Iraq, Kuwait, UAE, and Qatar all rely heavily on Strait of Hormuz to export oil and gas. Saudi Arabia fit reroute some crude through East-West pipeline to Red Sea, while UAE get Abu Dhabi Crude Oil Pipeline to Fujairah.
Attacks on Saudi infrastructure don already reduce production and pipeline throughput, making the region even more dependent on the strait remaining open. The situation don cause hardship for farmers for Midwest America. Doug Bartek, fifth-generation farmer for Nebraska, talk say high cost of fuel, equipment, and fertilizer—compounded by Iran war—don affect family livelihood. He talk say farmers dey “painted in the corner.”
Justin Sherlock, soybean farmer and president of North Dakota Soybean Growers Association, talk say “A lot of producers are pretty nervous going into this year. It looks like we’re going to have another year of negative returns.” Soybean prices don dey low for years, and global market don dey awash with soybeans, driven in part by Brazil wey surpass US as world largest soybean producer.
Midwest soybean farmers costs don rise. Overall farm production expenses, including seed and pesticide, don increase over time. Operating costs for soybean production don stay elevated since 2020 and dey projected to increase again for 2026. Cost of land na major issue for farmers. Midwest crop land values don increase, and most regional farmers rent some of their land.
Paul Mitchell, professor of agricultural and applied economics at University of Wisconsin-Madison, talk say farmers “very concerned about negative margins driven by low prices and high cost. There’s just a liquidity cash crunch for a lot of them and they’re just trying to figure out how to deal with everything.” Number of farms for US don shrink over time, and consolidation for farming na long-term trend.
Tariffs levied by President Trump for April 2025 exacerbate trade war with China, top buyer of US soybeans. China respond with retaliatory tariffs and effectively boycott US soybeans, cutting off major export market for Midwest farmers and driving price of soybeans even lower. Mike Cerny, soybean and winter wheat corn farmer for Sharon, Wisconsin, talk say “When that was announced and soybean prices basically collapsed, if you could afford to hold on to your beans and wait for better times, you were OK.”
US and China eventually reach deal for late 2025. Beijing commit to buy 12 million metric tons of soybeans by January and at least 25 million metric tons annually for next three years. China don meet initial soybean purchase goal, and Trump administration roll out $12 billion temporary aid package for December to boost farmers affected by trade war. But damage don already done.
Joseph Glauber, former chief economist at Department of Agriculture, talk say global competitors to US soybean farmers gain from trade war. “When China has put on tariffs against the U.S. they’ve tended to buy then from Brazil or Argentina, largely Brazil,” he add. “We’re not nearly as dominant in the world as we used to be in terms of the global export market for soybeans.”
After US and Israel attack Iran for February 28, severe slowdown for shipping traffic through Strait of Hormuz send price of oil soaring. Shipping disruption also largely stop export of nitrogen fertilizers manufactured for Persian Gulf and limit access to key fertilizer ingredients. Price of urea, most widely traded nitrogen fertilizer, skyrocket.
Soybeans no require nitrogen fertilizer, but e vital for corn and most soybean farmers also grow corn. About half global supply of urea come from Middle East, and Qatar and Saudi Arabia na two of top sources of US fertilizer imports. US and Iran agree to two-week ceasefire last week wey include reopening strait of Hormuz, but traffic remain slowed amid disagreements over Israeli attacks for Lebanon, and price of urea remain elevated.
Many Midwest farmers buy their fertilizer well in advance of spring planting season. But some farmers wey no buy early face elevated prices. Dave Walton, corn, soybean, and hay farmer for Iowa and vice president of American Soybean Association, talk for March say some of his neighbors no get cash on hand last fall to buy fertilizer and dey struggle to budget for fertilizer due to high prices.
The war also cause gasoline and diesel prices to surge, causing further headaches for farmers. Oil prices drop following ceasefire announcement, but war and closure of strait go have lasting impacts on farmers. Seth Goldstein, senior equity analyst at Morningstar, talk say facilities for Middle East wey critical for exporting chemicals, oil and other commodities don damage or destroy during war and e go take time for supply chains to recover.
“Facilities have been hit, like liquid natural gas plants,” Goldstein add. “You are also looking at a big supply crunch in commodity chemicals, which are the inputs for crop chemicals.” Chris Gould, corn and soybean farmer for Maple Park, Illinois, talk say “We burn a lot of diesel fuel. It’s hard to say if I’m gonna come out ahead or behind on this whole deal. But I suspect I’m going to come out behind.”
Farmers financial problems dey show for some measures. Farm bankruptcies, while still relatively low, continue to climb for 2025. For survey of 400 farmers conducted by researchers at Purdue Center for Commercial Agriculture for late March, almost half talk say their farm operation financially worse off than e be one year ago.
Goldstein talk say farmers high costs and low revenues contribute to spike in bankruptcies between 2024 and 2025. If costs rise faster than crop prices for future, he add, that “would strain farmers again and likely lead to more bankruptcies.” After 43 years of farming, Bartek talk say smell of fresh dirt still get am excited for spring planting. But he also hear of farmer suicides, bankruptcies, and “retirement sales” where farmers dey forced to auction off their operations due to financial problems.
Bartek compare farmers to gamblers wey put “millions of dollars in the dirt” hoping for returns. At times, Bartek doubt his own decision to go into farming. He also worry about his son, wey purchase farm few years ago. Bartek wonder: “Did I do the right thing helping him get into farming?”
Do you have a news tip for NNN? Please email us at editor @ nnn.ng
