Ships are currently waiting somewhere in the Persian Gulf. While one of the most important waterways in the world is essentially closed, hundreds of them—oil tankers, container ships, and freighters—are anchored offshore or hovering outside the Strait of Hormuz, immobile. In a matter of days, the conflict that started on February 28, 2026, when the US and Israel launched joint strikes against Iran and Iran retaliated with counter-strikes throughout the Gulf region, has done what geopolitical crises have always threatened to do but seldom manage all at once: simultaneously shut down the Strait of Hormuz, closed the airspace of four major regional economies, and pushed oil above $100 per barrel. The obvious victim of all this is not coffee. However, it is still a casualty, and most people are unaware of the ways in which a conflict on one side of the globe affects how much a café in Ho Chi Minh City or a roaster in Rotterdam must pay for its beans.
Up to 25% of the world’s liquefied natural gas and crude oil are transported through the Strait of Hormuz every day. Oil prices skyrocketed as soon as Iran blocked that waterway, and the energy shock quickly spread. In a single day, the price of natural gas in Europe increased by almost 40%. Shipping behemoths CMA CGM and Hapag-Lloyd ordered ships already inside the Persian Gulf to take refuge at important hubs like Jebel Ali, Abu Dhabi, and Doha and wait, completely stopping navigation through the Gulf. Depending on their origin and destination, ships that couldn’t wait rerouted around Africa’s southernmost point, the Cape of Good Hope, lengthening their transit times by ten to twenty days. That is not a small change in the schedule. Every shipment will result in weeks of extra exposure to fuel expenses, insurance premiums, and port delays.
Middle East Conflict & Global Coffee Supply Chain — Key Facts (2026)
| Conflict trigger date | February 28, 2026 — US and Israel launched major joint military strikes against Iran; Iran responded with counter-strikes against Israel and US military bases across the Gulf region |
| Critical chokepoint closed | Strait of Hormuz — narrow waterway connecting the Persian Gulf to the Gulf of Oman; Iran’s blockade immediately impacted energy markets and commercial shipping; ship traffic through the Strait dropped ~70% following strikes |
| Energy market shock | Oil prices surged over $100 per barrel; European natural gas prices jumped nearly 40% in a single day; the Strait handles up to one-fifth of the world’s crude oil and liquefied natural gas |
| Shipping reroute impact | Major carriers CMA CGM and Hapag-Lloyd suspended Gulf navigation; vessels rerouted around Cape of Good Hope — adding 10–20 additional days to Asia-Europe and Asia-US East Coast transit times depending on origin |
| Airspace closures | Qatar, UAE, Saudi Arabia, and Kuwait immediately closed sovereign airspace after strikes — severely reducing global air freight capacity on Asia-Europe-Middle East corridors |
| Coffee price reaction | Arabica futures briefly spiked to $3.01/lb on March 10, 2026, before settling — actual coffee commodity prices relatively stable due to predicted record 2026/27 global harvest of 180 million 60kg bags (first surplus in five years) |
| Brazilian harvest forecast | Conab projects a record 66.2 million bags for 2026; arabica output forecast at 44.1 million bags — up 23.3% year-on-year; but Brazilian producers remain reluctant to sell remaining current stocks |
| Vietnam impact | Routes not formally interrupted but freight costs increased significantly; shipments to Europe being held back; war risk premiums applied; Cape of Good Hope rerouting adds weeks to EU delivery timelines |
| East Africa impact | Uganda, Ethiopia, Kenya, Rwanda coffees rely on Suez Canal route to Europe — now disrupted or subject to rerouting via Cape of Good Hope, adding shipping time and cost |
| Fertilizer risk | Key fertilizer exports move through the Strait of Hormuz; closure extends shipping times and raises input costs for coffee producers across origin countries — affecting farm-level economics on top of logistics costs |
| Long-term concern | Gas-powered roasters in Asia most exposed to energy cost increases; base freight rates expected to climb for duration of conflict; roasters without forward contracts particularly vulnerable to spot price volatility |
The core of this issue, particularly with regard to coffee, is the Suez Canal. In addition to handling a sizable portion of Vietnam’s Robusta exports headed west, it is the most effective maritime route connecting East African origins—Ethiopia, Uganda, Kenya, and Rwanda—to European consumers. With significant imports from both regions, Europe is the world’s largest consumer market for coffee. Houthi attacks connected to the previous Gaza conflict already put pressure on the canal. Due to the widespread chaos in Gulf shipping and the rising premiums associated with war risk, many transportation companies have completely suspended Gulf reservations, forcing more ships to use the Cape of Good Hope route. Vietnamese traders have personally attested to this: shipments are being delayed domestically until a more accurate evaluation of the risks associated with crossing through Suez is completed, and freight costs to Europe have increased dramatically.
A projected record global harvest has mitigated the immediate price impact at the commodity level, and this aspect is important to comprehend. According to Rabobank’s most recent analysis, global coffee production is expected to reach an all-time high of 180 million 60-kilogram bags in 2026–2027—the first significant surplus in five years. With an increase in arabica production of 23.3% year over year, Brazil alone is expected to produce 66.2 million bags. Speculative price spikes are typically mitigated by that type of supply outlook. The market’s perception that physical scarcity is not an immediate threat is reflected in the fact that Arabica futures, which briefly reached $3.01 per pound on March 10, quickly declined. Coffee prices appeared to be responding almost slowly, according to Carley Garner, a senior commodity strategist at DeCarley Trading who has been closely monitoring these markets. The market is looking at the harvest data and finding it comforting, even as the logistics picture continues to deteriorate.
The more difficult issue is the indirect costs, which build up in ways that aren’t clearly visible in headline futures prices. Fertilizer production is influenced by energy costs, and this influences farm economics in the countries of origin. Every truck that transports coffee from the farm to the port, every roaster that uses gas to heat its drums, and every ship that travels across an ocean will pay more for fuel when oil prices are $100. Producers, traders, and roasters all experience a cost squeeze in different ways and at different times due to the simultaneous impact of rising energy costs on farm inputs and logistics, according to Laleska Moda of Hedgepoint Global Markets. Roasters who signed forward contracts prior to February are comparatively safe. The entire impact of the disruption is being felt in real time by those purchasing on the spot market.
Observing this develop has an almost enlightening quality. Prior Red Sea disruptions, tariff uncertainty, and weather-related production variability had already put pressure on the world’s coffee supply chain. The Iranian conflict exposed a system that was already overextended rather than creating a new one. It is currently impossible to say with certainty how long the Strait of Hormuz closure will last or whether Suez will resume its regular operations. The supply chain that emerges on the other side will look somewhat different from the one that entered 2026 expecting a record harvest to make everything easier, and even when the immediate crisis subsides, freight rates will rise and insurance premiums will take longer to unwind. Additionally, the rerouting habits formed now will leave residue in shipping contracts for months.
