The ongoing conflict in the Middle East is creating economic uncertainty that could lead Brazil to benefit from a surge in commodity prices, especially oil and fertilizers.
The conflict between the United States and Israel against Iran is contributing to global economic uncertainties, particularly in regards to commodity prices. The situation has resulted in a spike in oil prices due to Iranian Revolutionary Guard's blockade of the Strait of Hormuz and a reduction in oil supply from Gulf countries. Analysts predict widespread inflation as one of the potential consequences of this conflict, affecting various economies reliant on these resources.
In addition to the oil markets, the war is significantly impacting the availability of fertilizers, as approximately one-third of the world's fertilizers pass through the Strait of Hormuz. Iran, being one of the largest exporters of urea, which is a commonly used nitrogen fertilizer, plays a critical role in global agriculture. The uncertainty of how these conflicts may influence fertilizer prices has raised concerns among agricultural producers worldwide, as they rely heavily on these essential elements for crop production.
Recent weeks have already shown a trend of increasing commodity prices, with the CRB index—an important measure of basic raw materials like oil and food—reaching its highest level since 2011 as of March 9th. Speculators suggest that if these conditions persist, Brazil, with its strong agricultural sector, could see a new boom in its commodity market, driven by shifts in demand and supply resulting from the ongoing geopolitical tensions.
