The escalating war between the US, Israel, and Iran is driving a sharp increase in global prices for diesel and fertilizers, threatening to significantly undermine Ukraine’s agricultural production and export capacity, Reuters reported.
Ukrainian farmers are already feeling the impact. Mykola Maliienko, a 70-year-old farmer operating 1,200 hectares near the village of Malopolovetske, less than 100 kilometers (62 miles) southwest of Kyiv, said he is sowing 100 fewer hectares of corn this spring due to the spike in costs. According to Maliienko, diesel prices have nearly doubled since late February, reaching Hr. 92 ($2.12) per liter.
“Our export potential could fall substantially,” Maliienko said. “This year it will decline by 15% to 20%, and if the situation continues that could reach as much as 40%.”
The disruption in energy markets serves as an economic windfall for Russia. As a significant oil and gas producer, Moscow benefits from high global prices while providing its own farmers with cheap, domestic reserves of fuel and fertilizers. In contrast, Ukraine remains heavily dependent on imports after Russian strikes destroyed the country’s domestic refineries.
Industry experts warn that the crisis extends beyond fuel. The shortage of natural gas – a key component in nitrogen fertilizer production – is further straining agricultural budgets. Dmitry Skornyakov, CEO of HarvEast, predicts that average production costs for Ukrainian farmers could rise by 20% to 30% in the short term, with overall production volumes potentially falling by 5% to 10% this season.
This energy crisis coincides with a difficult marketing year for Kyiv. Ukraine exported 9.7 million tons of wheat in the first nine months of the 2025/26 season – a 25% decline compared to the previous year. While some analysts hope that rising global prices might offset the burden of high stocks, the increasing cost of inputs is making it harder for Ukrainian producers to remain competitive against Russian and EU counterparts.
Despite the wartime challenges and market consolidation – exemplified by Kernel’s recent $350 million acquisition of Enselco Holding – the survival of smaller and medium-sized farms now hinges on whether Middle Eastern tensions subside before the autumn harvest.