This week’s fanfare around the announcement of an EU-funded support package for farmers to help cope with increased fertiliser costs fell well short of farmer expectations.

The reality is, that the fallout from the war and the blockade of the Strait of Hormuz is only starting. Large tankers with oil, liquid natural gas and urea amongst other materials haven’t been able to sail through the Strait of Hormuz since the end of February. One-fifth of the world’s oil and liquefied natural gas, along with urea and ammonia flows through the Strait from the Middle East.

The shortages in these products are only starting to hit some sectors now and as supplies are depleted, this will put pressure on some of these inputs and invariably push prices up.

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There aren’t many solutions to the problem. Rerouting oil away from the Strait of Hormuz is difficult. Pivoting to other regions of supply like Russia isn’t an option with the Russian invasion of Ukraine ongoing.

There have been a number of false dawns about the war ending that failed to materialise. Some input costs like diesel and fertiliser have already gone up but are likely to go up a lot more as physical shortages start to impact supply.

Brent crude oil prices have risen by over 40% since the war began with the only solace being that global oil inventories started off 2026 at very high levels. Urea-based fertilisers have also seen a huge increase in prices, up 70% since the start of the war in Iran and the closure of the Strait.

Export ban

We have seen other countries like China move to ban exports of diesel and fertiliser while others have rationed fuel supplies.

Many countries have also moved to cut excise duties on diesel with governments, including Ireland, revising fiscal plans to try to protect consumers and their citizens from the economic shock.

The fact that a huge proportion of our fertiliser and fuel requirements are imported into Europe leaves European agriculture particularly exposed.

Some international industry commentators have warned that we are slowly entering into the biggest energy crisis of our time, one which will far surpass the most recent energy price shock experienced at the beginning of the Russia/Ukraine war.

Speaking to the Financial Times in March, Fatih Birol, the head of the International Energy Agency said that politicians were underestimating the scale of the crisis.

The fact that a huge proportion of our fertiliser and fuel requirements are imported into Europe leaves European agriculture particularly exposed

Two months later and not much has changed.

Europe has talked a lot about supporting its citizens and farmers in terms of reducing the burden that the current crisis is placing on them, but very little action has been taken.

There was some hope this week that the EU Commission would bring to the table some real options of support for farmers to deal with the huge increase in the cost of fertiliser but in reality, nothing materialised with farmers left in limbo as to what will happen when it comes to planting winter crops at the end of 2026 or growing grass in 2027.

A temporary abolition of the Carbon Border Adjustment Mechanism (CBAM) on fertiliser would be a simple way of reducing prices.

In January 2026, fertiliser prices were hiked with the introduction of CBAM, which is set to cost farmers across the EU an estimated €900m this year.

This puts the potential allocation of €400m from the European crisis reserve fund, which may being made available to farmers, into context.

The CBAM tax is projected to cost Irish farmers over €11m in its first year of operation and will rise significantly each year until 2034.

Fast forwarding CAP payments isn’t enough and won’t solve the issue.

Member states, including Ireland, must push harder for the temporary lifting of the tax to provide some certainty for farmers and avoid further food price inflation for its citizens.