Iran oil shock could add millions to farmers’ fuel bills

“The price of red diesel has rocketed to levels even higher than in 2022 in the wake of the Russian invasion of Ukraine. This fuel is used to help drill and harvest crops and apply fertiliser.  Farmers now face an oil price cash crisis, just as arable farm incomes are forecast to fall to record lows after last year’s drought [4]. 
 
“This is the second oil and gas price shock that farmers have faced in just a few years, coming on top of two of the worst harvests on record following prolonged heat and drought in 2025 and the wettest winter ever in 2024. Burning oil and gas is both driving more extreme weather and price shocks, which combine to undermine the resilience of our food security. Reducing emissions to net zero is the only scientific way to stop climate change, but it can also reduce exposure to this kind of volatility. Reducing the use of fertilisers made from gas is just one example of steps some farmers are already taking.” 
 
The oil price shock and increased costs of red diesel come just as many farmers will be undertaking critical field operations such as ploughing, drilling crops and applying pesticides and fertilisers, involving significant fuel usage. Although fertiliser prices have also soared, many farmers in England will have bought ahead before the war in Iran began. The same will not necessarily be true of red diesel, with farmers reluctant to store the fuel for extended periods as it can degrade. The wet weather since January has also delayed field operations in many areas.
 
Tom Edmondson, a mixed farmer from Buckinghamshire [5] said, “Growing cereals like wheat and barley is now a very risky business. With the extreme weather of recent years and repeated energy price shocks, it’s becoming increasingly difficult to make a margin on growing these key staples. I’m now focused on how I can de-risk my business by farming with nature. 
 
“We’ve introduced cover crops to help fix nitrogen and reduce our fertiliser bill, and moved away from ploughing to a direct drill system that has reduced our red diesel use from 14,000 litres per year to 5000 litres. With all this volatility, we desperately need more certainly from Government about the future of their green farming schemes. These have been vital in supporting my move to more regenerative, lower cost farming methods and boosting my resilience now in the face of these price increases, but there’s too much policy instability at the moment to be able to bank on them for the future.”
 
Edmondson has reduced his red diesel use by moving to more soil-friendly cultivation methods that use less fuel. On top of this, he has incorporated nature-friendly farming measures such as cover crops, that fix nitrogen and reduce fertiliser use, one of the biggest costs in any farm business growing arable crops such as wheat.
 
The analysis by ECIU is based on a conservative estimate of annual usage based on DESNZ data on how much red diesel UK agriculture uses. The £337m additional cost assumes that all red diesel for this year is bought at this price. This indicates significant exposure of farmers in England to the current oil shock. Using ONS data, which suggests much higher consumption of red diesel for agriculture, forestry and fishing, generates an estimate of additional costs of over a billion pounds this year [6].
 
Stuart Oates, a mixed farmer from Cornwall [7] said, “Being so dependent on fossil fuels is a huge risk to UK food security. We cannot have a serious debate about how food secure we are as a nation now without a clear plan for how to reduce our exposure to the volatility of oil, gas and chemical fertilisers. Without reducing our dependence on these fossil inputs, we are going to be stuck in a cycle of moving from one crisis to another. 
 
“As a farmer, I’m a price taker for both my inputs and outputs. All I can do is control my costs, and the best way to do that is reduce my exposure to fossil fuels, first of all fertiliser. Even if it’s not to tackle climate change, it makes sense for my bottom line.”