The closure of the Strait of Hormuz exposes a coffee supply chain profoundly dependant of petroleum, plastics, and fertilizers. Photo credit: Alimurat Ural
The blockade of the Strait of Hormuz has disrupted many of the world’s supply chains, and coffee has not been immune to the turmoil. While a relatively small amount of green coffee moves through the Strait, it is the interference with the petroleum and petrochemical sectors that has the potential to inflict longer-term pain on the industry as a whole.
Iran closed the Strait, a narrow waterway between the Persian Gulf and the Gulf of Oman, in late February following airstrikes by the United States and Israel that marked the beginning of the 2026 Iran War. Under normal circumstances, about 25% of the global seaborne oil trade and 20% of the liquid natural gas trade pass through the Strait. Its closure has upended energy markets and sent oil prices skyrocketing.
Coffee is reliant on petroleum and its byproducts. Farmers use fertilizer to increase yields and diesel to power machinery and processing equipment. Cargo ships require heavy fuel oil, while the majority of roasteries run their roasters on natural gas. Biodegradable alternatives are becoming more widely used, but plastic is still the basis of most packaging. Plastic also provides the lining for the billions of takeaway cups the industry goes through each year.
The impacts of the Strait’s closure on coffee will be felt in both the short and long term. Physical movement of green coffee from Africa and Asia to the Arabian Peninsula has already been disrupted. Some vessels have had to reroute around the Cape of Good Hope, while higher fuel and insurance costs will also increase the cost of shipping coffee.
The price and availability of diesel, used by farmers to power processing machinery and farm equipment, is already hurting farmers. In Brazil, the world’s largest coffee producer, diesel oil prices rose between 12-23% in March, depending on the state. In Honduras, the USDA warned of “ongoing pressure” on farmers from higher diesel prices and uncertainty in fertilizer supply.
Coffee production in many countries relies on synthetic fertilizers like nitrogen, which uses natural gas as an energy source and a feedstock. Almost one-third of all fertilizer moves through the Strait, prices for which have more than doubled since the Strait closed. Even if the war ends soon and the Strait reopens, it will take a long time for supply and prices to return to their previous levels.
Plastic is another petroleum-based product used across the coffee industry. It serves many purposes, from protecting green beans during transport to packaging roasted coffee, lining takeaway cups, and providing parts for home brewing equipment. The supply of raw material for various plastics has been impacted by the closure of the Strait of Hormuz, and prices have risen in response.
The price of coffee has soared over the past few years due to supply chain issues, tariffs, and falling production. Although the futures market has reacted to the Hormuz crisis, it hasn’t spiked as it did in the past, with forecasts of a record harvest in Brazil keeping the commodity price from eclipsing the highs of 2024/25. However, the longer the Strait of Hormuz stays closed, the bigger the impact will be on global agriculture — and the wider coffee industry.