Oil, Energy and Food: Which Countries in Europe Are Most Vulnerable to Rising Prices?

The Middle East conflict has sent oil prices soaring, with Brent crude surpassing $100 per barrel. This surge in energy costs, driven by US-Israeli strikes on Iran and Tehran’s retaliation, is expected to ripple across other sectors, including food. Experts warn that these effects could significantly raise living expenses in Europe, particularly for households reliant on imported goods.

Channels of Impact on Food Costs

According to Zsolt Darvas, a senior fellow at Bruegel, the crisis threatens to elevate global food prices through three interconnected pathways. These include disruptions to fertilizer and energy supplies, as well as escalating shipping expenses. The Strait of Hormuz, a vital artery for oil and fertilizer transport, has been heavily impacted, leading to higher production costs in agriculture.

“Global and European food prices are set to increase due to the conflict, which disrupts fertilizer and energy supply chains and raises shipping costs,” Darvas stated.

Maximo Torero, FAO chief economist, added that elevated energy prices influence everything from farm operations to transportation and storage. “These pressures will eventually translate to consumer food prices,” he explained. The FAO also highlighted that if farmers reduce fertilizer use to cut costs, future crop yields could decline, tightening grain supplies and pushing prices higher later in the year.

Energy Costs and Fertilizer Production

Europe’s reliance on natural gas for nitrogen-based fertilizers has intensified. With Gulf refineries supplying 60% of Europe’s jet fuel and 20% of its diesel in 2025, disruptions in these regions have already triggered a spike in transportation and logistics expenses. Higher gas prices further strain domestic fertilizer production, creating a dual challenge for farmers.

“European countries with major aviation hubs and those dependent on diesel for transport and agriculture will face the most severe consequences,” Torero noted.

Meanwhile, increased oil prices have boosted the profitability of biofuel production. This has led to a shift in demand toward ethanol and biodiesel, diverting crops like maize and soybeans from food production. Such changes could tighten global grain supplies and drive up food costs across the continent.

Europe’s Most Exposed Nations

The Netherlands, home to Europe’s largest refining cluster in Rotterdam, is deeply integrated with Gulf oil markets and thus highly susceptible to price fluctuations. Belgium, with its key logistics hub in Antwerp, also ranks among the nations most at risk. Germany, the continent’s largest diesel consumer, and France, Italy, face significant exposure due to their heavy dependence on energy imports and agricultural activities.

Following the Ukraine invasion in 2022, EU food and non-alcoholic beverage inflation hit a record 19%. The current crisis could reignite similar trends, especially in regions where energy and fuel costs are already elevated. As the FAO cautions, sustained high prices could lead to a sharper rise in food expenses by mid-2026, affecting millions of households across Europe.