Behind the Iran War, This 'Crunchy' Commodity Suddenly Reaps a Windfall

Pistachios have become one of the commodities quietly enjoying a windfall from the Iran war. The conflict temporarily disrupted pistachio exports through the Strait of Hormuz, causing shipments to drop 31% and driving a price surge that has benefited Californian farmers, who now account for around 60% of global pistachio production. The Dubai chocolate trend has also boosted demand. However, this gain is expected to be only temporary, as Iranian exports could recover if peace endures, whilst Californian farmers still face challenges from extreme weather and water-use restrictions.

For four generations, Joe Coelho’s family raised cattle near Riverdale, California. But in 2021, they sold their entire herd and switched to growing pistachios. The decision came at the right time. In May 2026, the price of pistachios in the United States reached US$5.30 per pound, or US$11.68 per kilogramme, according to market data provider Expana. That was the highest price in a decade. Within a year, the price had risen more than 25%, from US$3.28 per pound in December 2023 to US$4.14 a year later. This year, it has soared even higher. One of the causes lies more than 12,000 kilometres from Coelho’s orchard.

Even before the conflict erupted, demand for pistachios was already rising. The popularity of Dubai chocolate, a premium chocolate filled with pistachio cream that went viral on social media, helped lift consumption of the nut in various countries. But the war provided a fresh boost. Shipping disruptions through the Strait of Hormuz hampered Iranian pistachio exports. In the 30 days to 21 May, shipments of in-shell pistachios from Iran fell 31% compared with the same period last year. For the global market, that decline is significant. Iran is not a minor player. The country has cultivated and traded pistachios for thousands of years and remains one of the world’s main suppliers. When its supply is disrupted, global prices react immediately, and that price rise created an unexpected winner.

For Californian pistachio farmers, moments like this are nothing new. Their industry actually grew out of geopolitical turmoil. In 1979, when the Iran hostage crisis erupted, President Jimmy Carter banned imports of various Iranian products into the United States, including around 25 million pounds of pistachios. In the following decade, US farmers accused Iran of selling pistachios at excessively low prices to undercut competitors. Washington subsequently imposed a tariff of 241%. That empty space was gradually filled by California. Now, orchards in the state are estimated to account for about 60% of global pistachio production in 2025. When Iranian supply is disrupted again, Californian farmers once more enjoy a surge in demand. “I don’t want people to think I’m happy about this war. Nobody is,” Coelho told The Economist. “But the war takes away some of the world’s supply and opens up room for us to fill it.” The statement may sound cold, but commodity markets indeed work that way. When supply in one country is disrupted, producers elsewhere often become the beneficiaries. Sometimes, the winners are very far from the conflict zone.

The question now is no longer who benefits, but how long that benefit will last. If the situation in the Middle East calms, Iranian exports are expected to return to near-normal conditions. So far, damage to Iranian pistachio orchards is also considered not too extensive. Meanwhile, California faces its own problems. The International Nut & Dried Fruit Council estimates global pistachio production could fall by about a third in 2026. One cause is the heatwaves damaging orchards in California. Coelho pointed to a cluster of pistachio fruit on one of his trees. “You can see, they all look burnt,” he said. The problem does not stop there. Pistachio trees have a natural production cycle. There are years when the harvest is abundant, followed by years with much lower production. This means high prices do not necessarily translate into large profits. Farmers may sell at a higher price, but the quantity harvested is actually smaller.

The story of the pistachio shows how war can alter the fortunes of people far from the conflict zone. War in the Middle East does not only affect oil prices or stock markets. The conflict can also determine the income of farmers in California, the price of chocolate in Dubai, and the supply of nuts in supermarkets. A disruption in the Strait of Hormuz can push pistachio prices in America to a decade high. Yet, like many economic impacts of war, the gain is likely temporary. When supply returns to normal, pistachio farmers will once again face more familiar problems: weather, water, and crop yields.