North America Brief: Gas Up 80 Cents in Three Weeks, Fertilizer Costs Double for Farmers
US gasoline has jumped nearly $1/gallon since the conflict began. The Farm Bureau says some fertilizer costs have doubled. Analysts project food inflation rising 2 percentage points within 60 days. Trump's Iran deadline extension buys time but changes nothing at the pump.
The United States produces more oil than it consumes, yet American families are paying an additional $300 million per day in fuel costs compared to four weeks ago. That paradox sits at the centre of the North American experience of this crisis. Oil is a global commodity priced on global markets, and when 20 million barrels per day of flow through the Strait of Hormuz stops, every barrel on earth gets repriced.
Commodity snapshot (as of March 24)
- Brent crude: $113.52 per barrel (Brent-WTI spread at 11-year high)
- WTI crude: $99.88 per barrel
- US gasoline: national average $3.70/gallon (up from ~$3.00 pre-conflict)
- Gold: $4,417 per oz
- Coffee: $306.90 per lb
- Wheat: near two-year highs
Trump's deadline gambit
The weekend drama played out largely on social media and cable news. Trump's Friday ultimatum demanding Iran reopen the strait within 48 hours was met with Iranian counter-threats to target Gulf energy and desalination plants. Two Iranian missiles struck southern Israel, injuring over 100 people. Then hours before the deadline, Trump extended it by five days, claiming "very good and productive conversations." Iran denied any talks took place.
For American consumers, the diplomatic theatre matters less than the pipeline economics. Gas prices are not waiting for diplomacy. The national average has risen roughly 80 cents per gallon in three weeks, from under $3.00 to $3.70. West Coast states are seeing $4.50 or higher. And the Brent-WTI spread has blown out to over $14 per barrel, the widest in 11 years, reflecting how much more the rest of the world is paying relative to US benchmarks.
The fertilizer crisis hits at the worst time
This is the story that is not getting enough attention. Spring planting season for corn, America's most important crop, is weeks away. And fertilizer costs have surged dramatically, with some inputs doubling in price since late February.
The American Farm Bureau Federation has warned that the timing could not be worse. Urea, the nitrogen fertilizer essential for corn production, is up 35% and still climbing. The Strait of Hormuz is a critical corridor for global fertilizer trade, and Iran itself is a major exporter. Both supply sources are now cut off.
Wolfe Research estimates the fertilizer spike alone will add 2 percentage points to food inflation within 60 days. RSM US projects grocery inflation hitting 3.5-4% by mid-year, up from the 2% range before the conflict. The arithmetic is straightforward: more expensive fertilizer means more expensive corn, which means more expensive meat, dairy, eggs, and processed food.
Strategic reserves: 26 days of runway
The IEA's coordinated release of 400 million barrels from strategic petroleum reserves across member nations was positioned as a significant intervention. Run the numbers and it covers 26 days at the current 15 million barrel/day disruption rate. It is a bridge, not a solution.
The US Strategic Petroleum Reserve was already at historically low levels following drawdowns in 2022-2023. There is growing bipartisan concern about further depletion, particularly with no clear timeline for the strait to reopen.
Mortgage rates and the inflation feedback loop
A less obvious but significant consequence: US mortgage rates have risen from 5.98% to 6.11% since the conflict began. Bond markets are pricing in higher inflation expectations, which translates directly into borrowing costs. For a housing market that was just beginning to recover from the 2023-2025 rate cycle, the timing is painful.
The inflation feedback loop is now self-reinforcing. Higher energy costs drive transport and production costs higher. Those costs get passed to consumers. Inflation expectations rise. Bond yields rise. Mortgage rates rise. Consumer spending weakens. The Fed faces a familiar impossible choice between fighting inflation and supporting growth.
Canada: the loonie's double edge
Canada is both benefiting and suffering from the crisis. Higher oil prices boost Alberta's energy sector and government revenues, but the weaker Canadian dollar (now below 72 US cents) amplifies import costs for everything else. Maritime provinces are seeing the sharpest fuel price increases, with PEI reporting record pump prices. Grocery costs in Atlantic Canada are rising faster than the national average as transport surcharges compound the food supply chain.
What to watch this week
Trump's extended deadline expires Friday. Congressional pressure is building for a Jones Act waiver to allow foreign-flagged tankers to move fuel between US ports, which could ease domestic supply bottlenecks. The USDA's planting intentions report, due Thursday, will give the first hard data on whether farmers are adjusting crop plans in response to fertilizer costs. And OPEC+ meets informally Wednesday to discuss production levels.
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