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<\/p>\nThe fallout from the Iran conflict is adding new pressure to the global wine trade, from rising costs to disrupted logistics. Producers are now accelerating efforts to build more resilient and environmentally sustainable business models. Kathleen Willcox reports.<\/p>\n
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The Iran war has displaced an estimated 16 million people in the country, killed at least 250 children and 1,700 civilians, and has created what will surely be billions of dollars\u2019 worth of infrastructural and environmental damage, not to mention the psychological and physical trauma that will take generations to recover from.<\/p>\n
Its effect on the wine and agricultural sector across the world is, by comparison, minor. But it is equally impossible to ignore amid the logistical challenges posed by tariffs<\/a> and the widespread decline in consumption.<\/p>\n Direct and indirect impacts on supply chains<\/p>\n In response to the conflict and US blockade of Iranian ports, Iran has closed the Strait of Hormuz, a waterway through which around 20% of global oil and liquefied natural gas passes. The price of crude oil was under $70 pre conflict, and has gotten as high as $119, with gas and diesel prices up 36% and 47% respectively.<\/p>\n The crisis is hitting the wine industry from multiple directions, and the compounding effect of those shocks may make recovery, especially amid other headwinds, difficult for many.<\/p>\n \u201cGrapevines require annual applications of nitrogen, phosphorus, and sulfur, all of which are now repriced or constrained,\u201d says Francisco Martin Rayo, co-founder and CEO of Helios AI, an agricultural and soft commodities intelligence platform.<\/p>\n Countries affected by the war produce up to 49% of the world\u2019s urea and 30% of its global ammonia.<\/p>\n \u201cUrea, the primary nitrogen source, is up roughly 50% since February 28,\u201d Martin Rayo says. \u201cSulfur is a particular exposure: according to NDSU\u2019s Agricultural Trade Monitor, the Gulf accounts for approximately 44% of globally traded seaborne sulfur. This sulfur is not only a direct vineyard input but also the feedstock for phosphate fertiliser production globally, meaning the damage compounds across multiple nutrient categories simultaneously.\u201d<\/p>\n Rising costs across production and logistics<\/p>\n Glass bottle prices are also impacted.<\/p>\n \u201cThe natural gas price shock feeds directly into manufacturing costs, with some facilities already cutting production due to gas shortages,\u201d Martin Rayo says. \u201cThen logistics: Kuehne+Nagel, one of the world\u2019s largest freight forwarders, confirmed surcharges are hitting wine supply chains specifically. Rerouting around the Cape of Good Hope adds one to three weeks to transit times, which is a particular problem for temperature-sensitive shipments where delay creates quality risk, not just cost risk.\u201d<\/p>\n Larger companies, like Pernod Ricard<\/a>, are already warning that fallout from the Iran war is directly impacting sales as travel retail businesses in companies affected by the war will cause a 3% to 4% decline in net sales this year.<\/p>\n Consumer impact and shifting demand<\/p>\n Rising fuel prices may also further tamp down wine sales as another form of fallout, warns Rob McMillan, EVP and principal brand strategist, wine at Silicon Valley Bank.<\/p>\n \u201cWhen fuel prices spike like this, in past cycles in the US, there was a short downturn in consumption as consumers shuffled their spending choices,\u201d McMillan observes, adding that wineries will feel the impact in \u201cspiking fuel costs through surcharges and fees. Imports, particularly at the lower end of the continuum, have the greatest hit because of the higher costs of shipping. Domestic producers have a relative advantage because our industry producers do not have to ship across the ocean.\u201d<\/p>\n Logistics re-evaluated<\/p>\n Many major brands and importers have been evaluating, and re-evaluating their means of getting grapes into glass, and then to customers for years.<\/p>\n \u201cWe do not want to be dependent on global, unstructured markets,\u201d says Champagne Nicolas Feuillate\u2019s chief winemaker, Guillaume Roffiaen, explaining that the company has been strategically reducing its dependence on suppliers outside of their local region for a few years. \u201cWe have also worked to reduce our staff\u2019s carbon footprint by allowing people to work from home a few times a week.\u201d<\/p>\n Partner Content<\/p>\n Importers like Ethica Wines, which imports Italian wines and is based in the US, but also has offices in Canada and the Asia Pacific, are exposed on multiple fronts simultaneously, says Damiano Sorato, vice president of sales for the on-trade.<\/p>\n \u201cUncertainty around tariffs directly impacts our landed costs,\u201d Sorato says. \u201cThe freight environment is equally complex, with sustained pressure on ocean shipping. At the same time, weaker consumer purchasing power linked to higher energy costs adds another layer of pressure, compressing margins from the supply and demand sides.\u201d<\/p>\n Those rising costs will eventually be passed onto the consumer, Sorato says. To reduce the impact, he says they are evaluating their shipping options.<\/p>\n \u201cWe are focused on optimising container loads, consolidating shipments and working with producer partners on timing to reduce exposure to peak freight windows,\u201d Sorato says. \u201cThere is no magic alternative that eliminates the exposure.\u201d<\/p>\n Barring the possibility of a \u201cwholesale reinvention of how Italian wine moves to market,\u201d they are focused on \u201cintelligent mitigation.\u201d<\/p>\n Preparing for a more sustainable future<\/p>\n No one expects the Hormuz crisis to be the last energy, fuel, and supply challenge the industry will absorb.<\/p>\n The newly minted Harper\u2019s Rest in Sonoma is in the process of building a business on the premise that avoiding an overreliance on anything external, from inputs to energy, is essential for long-term success.<\/p>\n \u201cI view the current energy crisis as temporary, but there will be more of them,\u201d says Chris Underwood, proprietor of Harper\u2019s Rest. \u201cOur main motivation is doing what is right for the environment, our natural surroundings, and also our people.\u201d<\/p>\n At Harper\u2019s Rest, this entails reducing or eliminating the use of external chemicals, fertilisers, or energy. They are in the process of becoming regenerative organic certified, with a microgrid solar system set for completion this summer. The solar array will produce more energy than the winery will need to use, eliminating the impact of future energy disruptions and price spikes. Unused energy will be exported to the grid.<\/p>\n Harper\u2019s Rest already has one all-electric vehicle for the maintenance crew, and is looking into investing in more.<\/p>\n Nicolas Feuillate, meanwhile, has switched to biosource fuel for all of their trucking needs and is considering alternative shipping methods that do not require fuel.<\/p>\n \u201cWe are looking at the option of using sailing, but the problem is the price, which we do not want to pass along to our customer, and time,\u201d Roffiaen says. \u201cWe are also working on reducing the weight of our wine bottle from 735 grams to 700, with a target even lower eventually. We produce 9 bottles annually, and about 45% is sent overseas, so that would reduce shipping costs and our carbon footprint significantly.\u201d<\/p>\n Costs likely to reach consumers<\/p>\n Wine enthusiasts are not absorbing any of these additional costs yet, but it is coming.<\/p>\n \u201cThe 2026 vintage is being grown right now under these input costs, will be bottled in late 2026, and will be priced for release in 2027,\u201d Martin Rayo says. \u201cThat is when the bill arrives on the shelf.\u201d<\/p>\n In the meantime, producers will be doing everything they can to reduce their fuel costs, slash their reliance on external inputs, and streamline logistics. In the process, they will be building greener businesses with lower carbon footprints. There is no such thing as a silver lining to this conflict, but at least this will be one step toward a stronger, more self-sufficient, eco-friendly industry that is less reliant on the whims of mercurial leaders.<\/p>\n Related news<\/p>\n \n \n ![](\"https:\/\/www.europesays.com\/iran\/wp-content\/uploads\/2026\/04\/Villa-Rosina_Bottega-headquarters.jpg\"\/)
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