Hormuz, Arctic Shipping Disruptions Reshape Global Energy, Food Markets

The ongoing conflict and shipping disruptions in the Middle East are triggering a "multidirectional squeeze on world agriculture" that threatens global food security, according to a new report from S&P Global Institute cited by OilPrice.com. The crisis, stemming from the U.S. and Israel's war with Iran, has closed the Strait of Hormuz to key fertilizer feedstock exports, causing prices to double and risking hunger for millions. For North Dakota's Bakken region, a major agricultural and energy producer, this intertwines the fates of its oilfields and its farms.

The Strait of Hormuz, a critical chokepoint, was closed to nearly all shipping on February 28, 2026. Before that, half of the world's fertilizer feedstock exports passed through it, according to the S&P Global report. The disruption of chemicals like urea, ammonia, and natural gas—critical for nitrogen-based fertilizers—directly threatens the production of staple crops like corn and wheat. The International Monetary Fund projects a 10% increase in fertilizer prices this year, contributing to a 5% hike in food costs in 2026.

Concurrently, the shipping chaos is reshaping global crude oil flows. With traditional routes through the Strait of Hormuz and the Suez Canal disrupted, Russia is increasingly using the Northern Sea Route (NSR) to supply Asian buyers, OilPrice.com reports. Reuters data shows Russia's oil exports through the Arctic in 2026 are already nearly 50% higher than last year, with 20 million barrels shipped to Asia between July and mid-October. Traders expect another 5-10 million barrels by the season's end.

This rerouting, while more expensive and dangerous, offers Russia a path free from Western sanctions and inspections via an aging "shadow fleet." The shift contributes to record-high tanker freight rates as supertankers face bottlenecks, forcing Asian refiners to seek alternatives and changing global crude trade patterns.

For Bakken operators and the state of North Dakota, these parallel crises have significant implications. Higher global fertilizer prices directly increase input costs for the state's vast agricultural sector, which operates alongside the oil industry. Furthermore, the sustained high energy prices and freight costs, coupled with resilient biofuel demand noted by S&P Global, could support stronger crude oil prices, benefiting local producers. However, the volatility and the emergence of new, sanctions-evading supply routes like Russia's NSR add uncertainty to global market dynamics that influence Bakken crude pricing and competitiveness.

The S&P Global report warns the situation is a compounding effect of "higher energy and fertilizer costs, resilient biofuel-linked demand and El Niño-related weather risk." With the Strait of Hormuz control remaining "contentious and highly precarious," and fertilizer production recovery expected to take "months or even years," Bakken stakeholders face a prolonged period of elevated risks and costs at the intersection of energy and agriculture.