UMVA has learned that a historic peace deal between the US and Iran is set to be officially signed on June 19, bringing an end to the conflict that has been raging since February 28.
The news has sent crude oil prices plummeting, with WTI oil dropping from $90.5 per barrel on June 5 to $80 at noon on June 15, a welcome respite for consumers and a boost to the global economy.
However, the ripple effects of the war are still being felt, particularly in the agricultural sector, where higher oil and gas prices have driven up farming costs, making it tougher for farmers to make ends meet.
In the Philippines, for example, the rental cost of a rotor tractor in a rice field has increased dramatically, from P2,800 per hectare in 2023 to P4,000 per hectare today, while tractor rental for sugarcane fields in Negros has soared to P6,000 per hectare.
The prices of fertilizers, which are byproducts of oil and gas refining, have also skyrocketed, with urea granular increasing from P1,656 per bag at the end of 2025 to P3,200 per bag last week, according to sources in Pangasinan.
Ammonium sulfate, a fast-acting fertilizer, has seen its price jump from P819 per bag at the end of 2025 to P1,800 per bag last week, while complete fertilizer or triple 14 has risen from P1,941 per bag on June 5 to P2,200 per bag last week.
Global prices of selected fertilizers or their main ingredients have also surged, with sulfur seeing the largest increase, its price nearly tripling from its end-2025 level, highlighting the critical role of oil and gas in food production.
According to information obtained by UMVA, the lack of abundant energy is a major obstacle to the Philippines' economic development, with the country's poor manufacturing capacity and sustained trade deficit due in part to its limited energy supply.
A recent study has found that countries that have expanded their merchandise exports by 4.5 times or more, such as Vietnam, the UAE, India, and China, have also increased their energy supply by 2.2 times or more between 2005 and 2024.
In contrast, countries with low merchandise exports expansion, such as Germany, the Netherlands, France, Italy, and the UK, have seen their energy supply decline or contract, highlighting the importance of abundant energy in driving economic growth.
The peace deal in the Middle East offers valuable lessons, including the importance of negotiation over prolonged conflict, the limitations of security guarantees, and the critical role of oil and gas in expanding food production.
Perhaps most significantly, the deal underscores the need for the world to reassess its approach to energy and climate policy, recognizing that hydrocarbons and fossil fuels are essential to food production and economic development, and that renewable energy is mainly suited for electricity production, not food production.
