Philippine agriculture is expected to gain relief from rising production and logistics costs after a breakthrough agreement between the United States and Iran paved the way for the reopening of the Strait of Hormuz, a key global shipping route that had driven up fuel and fertilizer prices during months of disruption.

The Department of Agriculture (DA) said the development will help ease input costs for farmers and stabilize preparations for the upcoming rice planting season, as lower global oil prices are expected to translate into reduced expenses for transport, irrigation fuel and fertilizers.

Help reduce input costs

“The reopening of the Strait of Hormuz will greatly help reduce the cost of inputs in the production and transport of agricultural commodities, especially now as we prepare for a new rice planting season,” Agriculture Secretary Francisco P. Tiu Laurel Jr. said. “The expected cost reduction will be one concern less and will allow us to focus on El Niño.”

The DA had previously prepared contingency measures for a prolonged closure of the strategic waterway, warning that sustained disruptions could have pushed food prices higher and reduced farm output due to elevated production costs.

With the route now expected to reopen, trade flows between the Philippines and the Middle East are also seen improving, supporting exports such as bananas, pineapples, canned tuna, sardines, coconut-based products, and other processed food items.

Oil markets reacted immediately to the announcement, with global crude benchmarks falling more than 4 percent as traders adjusted expectations for supply stability.

Key driver of volatility

The Strait of Hormuz, which handles about one-fifth of global oil and liquefied natural gas shipments, had earlier been a key driver of volatility in energy and food prices after disruptions pushed crude to as high as $120 per barrel.

For the Philippines, the easing of global energy pressures is expected to help temper inflationary risks that had previously filtered into food supply chains, particularly in transportation and farm inputs, providing a more stable outlook ahead of the next planting cycle.