The ongoing conflict in the Middle East has not directly driven up coffee prices, which remain stable amid predictions of record harvests. However, spikes in oil prices are increasing freight, energy, and fertiliser costs, posing indirect risks to the coffee industry. Escalating tensions between the US, Israel, and Iran have led to the closure of the Strait of Hormuz, disrupting global supply chains.
The conflict escalated on 28 February 2026, when the US and Israel launched joint military strikes against Iran. Iran retaliated with strikes on Israel and US military bases in the Gulf region. In response, Iran blocked foreign traffic through the Strait of Hormuz, a critical waterway for global oil transport.
Coffee prices have shown resilience. Arabica futures reached US$3.01/lb on 10 March 2026 but have since stabilized. "It’s interesting to see sluggish coffee prices; the market doesn’t seem to be reacting," said Carley Garner, a senior commodity strategist at DeCarley Trading. "And it’s likely that coffee prices will keep falling."
Forecasts support this stability. Rabobank estimates global coffee production at 180 million 60kg bags for 2026/27, marking the first significant surplus in five years. Brazil's Conab projects a record 66.2 million bags, with arabica output at 44.1 million bags, a 23.3% increase year-on-year.
Indirect effects from the conflict are more concerning. Oil prices have surpassed US$100 per barrel, the largest energy shock since 2022. This raises freight and insurance costs, with commercial ships attacked near the Strait, forcing reroutes via the Cape of Good Hope and 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," Garner noted. "Again, it’s more of an indirect effect on coffee."
Energy costs impact roasters using gas-powered machines, while rising natural gas and oil prices inflate fertiliser and pesticide expenses for producers. "Higher fertiliser costs are a problem for any agricultural producer, including coffee," Garner explained. Smaller producers face disproportionate pressure compared to larger roasters and traders.
US President Donald Trump described the war as "very complete," and the International Energy Agency released record oil reserves to ease prices. The conflict continues without resolution, prompting advice for roasters to secure green coffee shipments ahead of potential disruptions, especially from Asian origins.
