Will conflict in the Middle East make coffee more expensive?

Key takeaways

• Coffee prices remain stable despite the ongoing Middle East conflict.
• Predicted record 2026/27 harvests may push coffee prices lower in the coming weeks.
• But oil price spikes are raising freight, insurance, and energy costs – indirectly making coffee more expensive.
• Producers will also feel pressure from rising fertiliser prices.

Escalating tensions between the US, Israel, and Iran have pushed the Middle East into another period of political instability. And as we saw with tariffs, coffee is highly vulnerable to geopolitical risks and conflict.

On 28 February 2026, the US and Israel launched major joint military strikes against Iran. Iran responded, also launching major strikes against Israel and US military bases across the Gulf region. The situation is complex. The Iranian regime has faced serious criticism for domestic repression, while Western intervention in the Middle East has a long history of destabilisation.

The conflict also has serious implications for the global economy and many major commodities, including coffee. It pressures supply chains, disrupts logistics, and influences pricing, which inevitably trickles down to the end consumer.

The closure of the Strait of Hormuz – a narrow waterway connecting the Persian Gulf with the Gulf of Oman – is arguably having the biggest impact on coffee and other commodities. The knock-on effects of the blockade are creating a complex, rapidly changing market for producers, traders, and roasters to navigate, with uncertainty about how long the conflict will last.

You may also like our article on why higher coffee prices don’t always mean higher quality.

Record harvest predictions are stabilising coffee prices

Arabica futures spiked at US$3.01/lb on 10 March 2026, but they have since settled as the war continues. Effectively, this shows that the conflict in the Middle East has little direct impact on coffee prices.

“It’s interesting to see sluggish coffee prices; the market doesn’t seem to be reacting,” says Carley Garner, a senior commodity strategist and broker at DeCarley Trading. “And it’s likely that coffee prices will keep falling.”

Predicted bumper crops for the upcoming harvest could bring coffee prices down further in the coming weeks. Rabobank’s latest report estimates 2026/27 global coffee production at an all-time high of 180 million 60kg bags – the first significant coffee surplus in five years. Conab, Brazil’s national supply agency, also projects a record 66.2 million bags for 2026, with arabica output alone forecast at 44.1 million bags, up 23.3% year-on-year.

This positive outlook eases scarcity concerns, reduces the risk of supply shortages, and mitigates speculative trading that drives volatility. But the knock-on effects of the war are affecting the wider coffee supply chain, raising operating costs for roasters, traders, and producers in both the short and long term.

Strait of Hormuz closure

In response to US-Israel military strikes, Iran has blocked foreign traffic through the Strait of Hormuz. Very little coffee passes through the channel, but roasters and importers in the Gulf region are likely to experience significant disruptions to their incoming shipments.

Oil shortages are the biggest concern for the coffee industry. The Strait of Hormuz transports up to a fifth of the world’s crude oil and natural liquefied gas, making it one of the world’s most strategically important chokepoints. Iran’s blockade has created the most significant global energy shock since Russia’s invasion of Ukraine in 2022, causing oil prices to hit over US$100 a barrel.

“When the price of oil skyrockets, commodities start to rally, and investors try to hedge their inflation risk,” Carley explains. “Corn, wheat, and soybeans are moving higher, but they are more directly impacted than coffee.”

Oil is the world’s most important source of energy. It’s the primary fuel for global transportation, a key ingredient in thousands of products (such as fertilisers and pesticides), and a major driver of logistics costs. This means price shocks affect almost every industry.

“If oil prices stay elevated, we all have a problem. I’ve only seen oil spikes like this in 2008, 2011, and 2022, and in each case, the stock market suffered,” she adds. “Eventually, oil became too expensive and crushed demand for everything, which is a real risk.”

Several reports also state that commercial shipping vessels have been attacked near the Strait of Hormuz, forcing others to reroute via the Cape of Good Hope. Inevitably, this raises freight and insurance costs and could lead to shipping delays of up to three or four weeks.

“The freight industry as a whole is going to raise prices because insurance and fuel costs are higher,” Carley says. “Again, it’s more of an indirect effect on coffee.”

Logistical uncertainty poses longer-term risks to coffee

The conflict in the Middle East is still ongoing, with no clear end in sight. In a likely attempt to bring down oil and natural gas prices, US President Donald Trump recently stated the war was “very complete”, yet attacks from both sides have continued to escalate.

“He has an incentive to try to talk the markets down,” Carley explains. “The International Energy Agency also just launched a record release of oil reserves to add supply and bring down prices.

“There are many sceptics who believe this strategy won’t work because it’s such a small amount of oil compared to global demand, but the Biden administration managed it in 2022,” she adds. “Markets are very emotional; it’s like a mental exercise. Sometimes you only need to change the hearts and minds of market participants, so it could work again this time.”

So far, the release of emergency reserves has failed to calm mounting fears over a devastating global oil shortage.

The global coffee industry is not insulated from rising oil and natural gas prices. Roasters using gas-powered machines are directly affected by sharp increases in energy costs, potentially prompting more to switch to electric machines if prices don’t stabilise in the long term. Many roasters in Asia, which is heavily reliant on energy from the Middle East, would be hit the hardest.

Shipping delays and increased freight costs will also affect the global trade of coffee. For now, spot purchasing is likely to be most affected. “If roasters have locked in prices on forward contracts, then they have essentially hedged out some of the freight and insurance risks,” says Carley.

But in the long term, base freight rates are likely to climb. Coffee-producing countries with shipping routes close to the conflict zone, including Vietnam, are already seeing war risk premiums applied.

Rising fertiliser costs

Natural gas and crude oil are used to produce, transport, and apply synthetic fertilisers and pesticides. With the Strait of Hormuz still closed, producers will face rising input costs for farming, especially for the upcoming harvests.

“Higher fertiliser costs are a problem for any agricultural producer, including coffee,” Carley explains. “The last time we went through a similar cycle in 2022, the price of natural gas skyrocketed, which impacted fertiliser costs almost immediately. It then takes a very long time to stabilise.”

When geopolitical uncertainty impacts coffee, the pressure doesn’t fall evenly along the supply chain. Larger roasters and traders have more leverage to absorb disruption, while smaller producers, with much less capital, don’t. With higher costs of production, producers could struggle to turn a profit.

While the conflict in the Middle East doesn’t directly affect coffee prices, it has real implications for roasters, traders, and producers.

“I don’t expect the conflict in the Middle East to be a Covid-19-level of disruption, but it could be too soon to tell,” Carley explains. “If the conflict settles or some other group or entity takes control of the Strait of Hormuz, it’s possible that we enter a deflationary cycle, where shipping costs are lower, and everything moves faster. It’s unlikely, but not impossible.”

For now, the coffee industry should stay informed. For roasters in particular, securing green coffee shipments in advance is recommended, as shipping times are likely to increase, and availability from certain origins, particularly in Asia, could tighten in the weeks ahead.

Enjoyed this? Then read our article on where higher coffee prices actually go along the supply chain.

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