#commodity-prices

#commodity-prices

Spring seeding is underway, and as farmers spend long hours in the tractor planting crops, they're facing hefty increases to the cost of diesel and fertilizer. They're also already concerned about the 2027 crop year, since many will be making large fuel and fertilizer purchases in the months ahead. Fighting in the Middle East has sent commodity prices soaring. As the conflict stretches into its third month, nitrogen-fertilizer prices remain sky-high, while the cost of diesel fuel for tractors and other farm machinery continues to cut into the profits farmers hope to make on their summer crops.

A prolonged disruption in the Strait of Hormuz could result in a global food catastrophe, as shipments of critical agricultural inputs remain blocked due to the US-Israel war on Iran.

The scale of what is at stake cannot be overstated. Oil companies can likely absorb a one- to two-week slowdown. A full or near-full closure lasting a month or more would require demand destruction at levels that could push crude well into triple digits and European natural gas prices toward or above the crisis levels seen in 2022.

This literally could not be happening at a worse time. The conflict in the Middle East is choking global supplies of fertilizer right before the crucial spring planting season, affecting American farmers already squeezed for months by tariff wars and threatening the global supply chain of essential agricultural inputs.

The SPDR S&P Oil & Gas Exploration & Production ETF ( NYSEARCA:XOP) tracks a basket of U.S. energy producers at a pivotal moment for the sector. As of February 13, 2026, the fund trades at $147.89, delivering a 17.1% year-to-date gain despite persistent commodity headwinds. This resilience reflects the portfolio's diversification across upstream producers, even as individual holdings face margin pressure from lower realized prices.

ConocoPhillips reported disappointing fourth-quarter results on February 5, 2026, missing both earnings and revenue estimates as lower oil prices overshadowed production gains from the Marathon Oil acquisition. The Houston-based energy producer posted adjusted EPS of $1.02, falling short of the $1.12 consensus estimate by 9%. Revenue of $14.19 billion also missed expectations of $14.34 billion. Net income tumbled to $1.44 billion from $2.30 billion in the year-ago quarter, a 37.3% decline driven primarily by weaker commodity prices.