Check our advice monitor at ProFarmer.com for updates to our marketing plan.
Maritime chokepoints are having a moment.
Traffic through the Strait of Hormuz has again largely dried up as the U.S. and Iran resumed hostilities. This week, Iran-backed Houthi rebels in Yemen attacked tankers in the Red Sea, threatening the Bab el-Mandeb Strait – another crucial maritime chokepoint – which lies between the Horn of Africa and the Middle East, connecting the Red Sea to the Gulf of Aden and Arabian Sea. That accelerated a rally in crude oil futures, with Brent futures, the global benchmark, surging more than $7 a barrel to trade above the $100 level for the first time since May.
The Bab el-Mandeb Strait has historically accounted for much less maritime crude flow, at around 4.2 million barrels a day, than the Strait of Hormuz, at around 21 mbd. But it has grown in importance as a safety valve for Saudi crude exports via the Yanbu pipeline. Before the war, Saudi Arabia exported around 1 mbd from Yanbu. The number now stands at 5 mbd, noted Tom Essaye, founder of Sevens Report Research, making it an important workaround. Essaye argued that Saudi Arabia could instead move oil from Yanbu through the Suez Canal, but noted that would significantly extend the trip to Asian customers. That means the closure of the Bab el-Mandeb wouldn’t materially disrupt the global flow of oil, but would complicate global flows and add some further premium to crude.
Helima Croft, head of global commodity research at RBC Capital Markets, contends the danger is further escalation. The fighting between the U.S. and Iran continues to escalate. President Donald Trump’s threat of more severe attacks on Iran and the Houthis directly, including energy infrastructure, raises the specter of Iranian retaliation against regional energy and critical infrastructure, Croft said in a research note.
- “Given the dangerous escalation currently unfolding, we remain of the view that oil prices could potentially take out the Russia/Ukraine oil price highs of $128/bbl in 2022 or even the 2008 peak of $146/bbl, especially in the worst-case scenario of a full regional war,” she said.
Diesel and gasoline prices also continue to soar, which brings us to the Black Sea. RBC analysts noted that since the beginning of the month, over 150 tankers have been targeted in the Black Sea and Sea of Azov, reflecting a broadening of Ukrainian strategy to include attacks at sea. While damage to refineries has pushed Russian to export more raw crude, the latest strikes represent incremental risk to crude exports from the region, as the CPC terminal at Novorossiysk faces related interruption, the analysts noted. They added that Kazakhstan’s 1.7 mb/d crude production is also at risk as it sends 80% of its exports via CPC has few other options.
The hit to Russian refineries, and Moscow’s decision to bar exports of diesel due to the resulting domestic fuel shortage, has sent global prices for the fuel soaring.
- “Currently, ~20% of waterborne diesel supply is constrained by [Strait of Hormuz] issues and the Russian export ban. West of Suez, supply is disproportionately impacted as a large percentage of recent Russian (~80%) and pre-war Mideast Gulf flows (~65%) went to Africa, South America and Europe,” wrote strategists at Macquarie, in a note. “As a result, these regions are all competing for U.S. exports in a period when global stocks are typically built ahead of the peak demand season.”
The fighting in the Black Sea region has helped spark big gains for wheat and the rest of the grain and soy complex, alongside hot weather in the western Corn Belt and Western Europe. Shipowners have temporarily suspended vessel arrivals at Ukraine’s Black Sea ports for agricultural exports after a recent surge in Russian attacks on ports and merchant shipping, the country’s agriculture minister said, according to Reuters. Ukraine has lost about a third of its capacity to export grain via the Black Sea ports due to Russian missile and drone attacks, traders and analysts have said.
New tariffs: The U.S. will collect duties ranging from 10% to 12.5% on imports from most major trading partners, in what Bloomberg described as the biggest move yet to reconstruct President Donald Trump’s tariff wall that was leveled by the Supreme Court. The new tariffs follow a probe into the alleged failure of around 60 economies to prevent forced labor in their supply chains to the detriment of American workers. Goods from 10 trading partners deemed to have adopted forced-labor restrictions will be subject to 10% tariffs, including Mexico, the UK, Canada and India. Duties on items from the European Union and Taiwan will be at least 10% and products from Japan, Switzerland and South Korea will be taxed at at least 12.5% in a way that complies with the trade agreements they reached with the US, according to a Federal Register notice published Thursday. Products from dozens of others will face a 12.5% charge. The South China Morning Post said China will face a 12.5% rate.
USDA timber investment: USDA on Thursday said it would guarantee is guaranteeing $80 million through the Timber Production Expansion Guaranteed Loan Program (TPEP) and Business and Industry Guaranteed Loan Program to support businesses in Oregon and Nevada, boost domestic timber production, and improve forest health. These investments represent a commitment by the Trump Administration to expand American timber production by 25%, reduce wildfire risk, and save American lives and communities by strengthening domestic wood processing capacity, USDA said in a news release.
Ethanol tariff won’t cause much pain to Brazil: An additional 25% US tariff on Brazilian ethanol is expected to hurt some exporters without significantly affecting Brazil’s broader economy, Brazil Stock Guide reported, noting that the American market represents a relatively small share of the country’s overseas sales.The US received less than 16% of Brazil’s ethanol export volume in 2025, according to industry data cited by Agência Brasil on Wednesday, the report said. Economists interviewed by the news agency said the measure carries a strong political component and is unlikely to cause widespread disruption across Brazil’s biofuel industry. Brazil exported about 1.6 million cubic meters of ethanol last year, generating almost $1 billion in revenue, according to the report. Shipments to the US totaled roughly 253,000 cubic meters and were valued at $163 million.