Oil dependence, the Strait of Hormuz & NZ agriculture’s vulnerability

Agricultural production is intimately connected to relatively cheap and available oil. From the moment seeds are sown to the day produce arrives at the supermarket, oil is the silent and often hidden force driving every stage. Diesel powers tractors, combine harvesters, and irrigation pumps. Oil-derived chemicals—especially Middle Eastern crude rich in sulphur are the backbone of fertilisers, pesticides, and herbicides, enabling farmers to achieve higher yields and combat pests with specially bred crops.

Modern transportation networks are reliant on fuel to move crops, livestock, and farm inputs across continents, making the current global food system possible. Beyond machinery and transport, oil’s influence extends to packaging, refrigeration, and the infrastructure that keeps food fresh and safe.

As a result, the price and availability of oil are closely tied to the cost of food production and distribution, with farmers and consumers alike vulnerable to fluctuations in global energy markets.

The strait of hormuz and global oil security

At the heart of this intricate web lies the Strait of Hormuz—a narrow but vital channel through which roughly 20% of the world’s oil (but closer to 40% of the world’s ‘tradable’ oil) flows. Its strategic importance is clearly immense, and the current Israel–US backed Iranian conflict and resulting disruption of sea traffic through the Strait of Hormuz has reverberated through economies far beyond the Persian Gulf.

We are fast approaching a point where restricted oil flows have not just resulted in observed price spikes, but will impact every aspect of current global civilisation in ways that will not be immediately obvious and will take many months to unfold.

Fruit and vegetables at the supermarket.

Implications for agriculture and food supply chains

For agriculture, the impacts will be profound and ongoing. Farmers would face soaring fuel costs, making it more expensive to operate machinery, prepare land for crops, and irrigate fields. Fertiliser prices, already sensitive to oil market shifts, could (and probably will) rise dramatically, limiting access and forcing difficult choices about what and how much to plant.

The Northern Hemisphere planting season is nearly upon us. Lower crop yields and further transportation bottlenecks could slow the movement of fresh produce, livestock, and grains, leading to spoilage and supply chain disruptions, and causing retail shortages and higher consumer prices the following season.

These pressures would likely be intense and ongoing as supply chains sought to re-equilibrate—even if risk-free transit of oil through the Strait of Hormuz is established in short order.

Food security, energy flows and system fragility

Ultimately, the interdependence between agriculture and oil, and the critical role of the Strait of Hormuz, highlight the fragility of our food supply in the face of energy disruptions. These unseen threats remind us that ensuring food security requires not only robust agricultural practices but also stable energy flows and thoughtful risk management at both the farm and global scales.

Building resilience before crisis hits

Increasing the resilience of your own farming system has never been more pressing. One way to achieve this is to reduce dependence on external inputs (fuel, feed, fertiliser, etc.) and move towards a system that maximises on-farm potential for regeneration. Of course, this is best prepared for as a process of transition, rather than imposed out of necessity by the flick of a switch. It all starts with a conversation about your place, your goals, and creating your plan.

So, what might be holding farmers back from making this more resilient and regenerative transition?

As an oversimplification, the current agricultural system has developed over many years to optimise for commodified products in a globalised market. Everything from practices, production, processing, and payment follow suit. There is a significant barrier in the minds of many farmers that any transition carries outsized financial risk, especially where debt servicing is a major cost, and no guarantee of improved outcomes on-farm or financially through markets.

There is often a social perception among farmers that more regenerative transitions are ‘fringe’ ideas that make great YouTube videos but do not sound like farm management. Consequently, regenerative community training and technical support is confined to isolated pockets of motivated individuals, not mainstream producer organisations.

But while ideological proponents and opponents of regenerative agriculture square off, on-farm input and labour costs continue to rise, and commodity prices remain high but volatile and unlikely to keep pace with financing and other costs, continuously eroding already wafer-thin margins. Add to that any supply chain-related constraints or interruptions and input price spikes, and the conditions have been created for further stress in a farming community that has already pruned out as much cost as possible.

“Dig the well before you need the water” is wise advice. Make preparations, plans, and transitions over time, before painful changes are imposed. There is no ‘one-size fits all’ prescription. Everyone’s situation and goals are different, but there is a theme and a series of guiding principles.

Maybe recent overseas events have brought the need for that conversation a little closer to home. If so, maybe it’s time to get in touch and make a start or check out those already on the journey.

Ata Regenerative and the global regeneration standard

Ata Regenerative became the first Savory Hub for New Zealand in 2017 and currently monitors 245 farms across 500,000 hectares. Globally, EOV covers 3.75 million hectares and is recognised as the gold standard, giving farmers, brands, and consumers confidence that production supports genuine regeneration.

We’re proud to support farmers who are ready to lead the shift toward a more resilient, regenerative future that works with nature, not against it.

Contact us today to start the conversation about what that could look like on your land.