Diesel Jumps, Margins Shrink: Canadian Seed Growers Feel Impact of Hormuz Crisis

Canadian seed growers are grappling with rising diesel and fertilizer costs as geopolitical tensions around the Strait of Hormuz have sent global energy markets into turmoil ahead of the 2026 growing season. With already thin margins, Prairie producers are struggling to absorb these increased expenses, which are being driven by the volatility in energy prices caused by the Middle East crisis.

The Strait of Hormuz, a critical chokepoint for global oil shipments, has once again become a focal point of geopolitical instability. Roughly a fifth of the world's petroleum liquids pass through this narrow waterway each day, making it a vital artery for global energy supply. Any perceived threat to the safe passage of oil through the strait triggers immediate price volatility in energy markets, as investors and traders price in potential risks even before physical supply disruptions occur.

Canadian farmers and seed growers are feeling the ripple effects of these tensions, despite the geopolitical crisis being thousands of kilometres away. Nick Sekulic, a seed grower in Alberta and owner of Prestville Farms, explains that diesel prices, which had been relatively low and stable, shifted almost overnight in response to the escalating conflict in the Middle East and the resulting impact on the Strait of Hormuz. "Before this conflict, diesel prices were relatively low and flat," Sekulic says. "We didn't see the hedging opportunity."

However, this changed quickly once tensions escalated. "The Monday after the conflict opened up," Sekulic recalls, "I called my agent. He said [pricing] was flat... then three or four days later, you couldn't get a contract price." The rapid shift in prices reflects how energy markets react not only to actual supply disruptions but also to the uncertainty itself. Even without immediate shortages in North America, prices rose as suppliers added a risk premium tied to potential future disruptions.

"Domestic diesel production is irrelevant," Sekulic notes. "We have decent domestic production, but the global market is what drives the prices we pay here in Canada. The Strait of Hormuz tensions are affecting global supply, and that's driving up prices for everyone, including us."

The situation is particularly challenging for Canadian seed growers, who are already operating with thin margins. With rising costs for both diesel and fertilizers, many producers are finding it difficult to absorb these additional expenses without compromising their profitability. The 2026 growing season, which is just around the corner, will be a particularly trying time for Prairie farmers, who are already bracing for the impact of these increased costs.

"We're trying to plan for the season, but the uncertainty is making it really hard," Sekulic admits. "We need to know what we're dealing with in terms of costs so we can make informed decisions about planting and production. But with prices fluctuating so much, it's really difficult to get a clear picture of where we stand."

The situation in the Strait of Hormuz is not the first time that geopolitical tensions have caused energy prices to spike, and it is unlikely to be the last. As long as the region remains a hotbed of instability, Canadian seed growers and farmers will continue to feel the effects of these price fluctuations.

In the meantime, producers are looking for ways to mitigate the impact of rising costs. Some are exploring alternative energy sources or investing in more efficient equipment to reduce their reliance on diesel. Others are turning to government assistance or insurance programs designed to help farmers and growers navigate the uncertainties of the global market.

Despite these challenges, many Canadian seed growers remain resilient and determined to weather the storm. "We've faced tough times before, and we'll get through this too," Sekulic says. "But it's important that our government and policymakers recognize the risks we're facing and take steps to support us. We need stability and predictability if we're going to continue producing the high-quality seeds that Canada is known for around the world."

As the 2026 growing season approaches, Canadian seed growers will be keeping a close eye on developments in the Strait of Hormuz and the global energy market. With rising costs and tightening margins, the ability to navigate these uncertain times will be more crucial than ever for the industry's long-term success.