Diesel Prices Near €2/Liter
The Iran war is driving diesel prices toward €2/liter in Spain as supply chain shocks compound with weather crop failures and high commodities. Users note that serial disruptions multiply effects from fertilizer shortages to food shocks, with market power in meat packing driving up fruit, grains, beef, eggs, and dairy prices.
The conflict in Iran has pushed global oil prices to their highest levels since 2022, with Brent crude, the international benchmark, surging past $114 a barrel. This is largely due to the disruption of shipping through the Strait of Hormuz, a critical artery for global trade through which about one-fifth of the world's oil supply typically passes. For comparison, the average price for a liter of diesel in Spain between 2016 and 2026 was approximately €1.32, with the previous maximum price hitting €2.08 in June 2022. As of early March 2026, the price was around €1.44 to €1.48 per liter, showing a sharp increase as the conflict's effects ripple through the market. The crisis extends beyond fuel, impacting fertilizer production, which is heavily reliant on natural gas. Natural gas prices have surged, driving up the cost of nitrogen fertilizers. Russia and its ally Belarus control over a third of the global potash exports, another key fertilizer ingredient, and supply chain disruptions have led to dramatic price spikes for essential nutrients like potash and phosphates. This fertilizer shortage directly translates to higher food production costs, as these nutrients are essential for crop growth and yield. The increased costs for farmers are then passed on to consumers, affecting the price of staples. This year's crops were largely grown with fertilizer purchased before the major price spikes, but future harvests are at risk. In the meat industry, a high degree of market concentration allows a few companies to influence prices. The "Big Four" meatpackers—JBS, Cargill, Tyson Foods, and National Beef—control about 85% of the U.S. beef processing market. This concentration can allow them to pay lower prices to cattle ranchers while increasing margins between what they pay and the wholesale price of beef. Extreme weather events are compounding these issues by causing crop failures. In 2024, severe droughts and excessive rainfall impacted wheat yields, while devastating floods in Spain in late 2024 compromised orange and persimmon crops. These weather-related disruptions further reduce food supply and drive up prices for consumers.
