Industry Trends

Why the Middle East is Turning to Vertical Farms: Food Security and the Structure of Oil Dependence

2026-04-12

There was a news story that the effective closure of the Strait of Hormuz due to the Iran war caused international air cargo rates to spike by as much as 95% (Hortidaily, 2026).

The numbers are striking, but what caught my attention was something else.

The Middle East is the region closest to the “epicenter” of this logistics crisis. And at the same time, it is a region with an extremely low food self-sufficiency rate.

Oil Is There, but Food Is Not

Saudi Arabia, UAE, Qatar—these countries are among the world’s top oil producers, but they rely on imports for most of the food they consume domestically.

A climate and soil that are unsuited to agriculture, and chronic water shortages. It is simply not an environment where large quantities of food can be grown in open fields.

Sell oil, earn foreign currency, buy food—this has been the structure for many years. In the UAE, about 90% of food is said to depend on imports.

The structure of Middle Eastern oil-producing countries, where oil revenue underwrites food imports, is being shaken by a crisis occurring in the Strait of Hormuz, which lies close to the coasts of the Gulf states, including the UAE. This is not a story of “every time transport costs rise, local production for local consumption becomes relatively cheaper.” The risk that food simply stops arriving is becoming real.

Why the Middle East is Turning to Vertical Farms

In the UAE, Saudi Arabia, and Kuwait, investment in vertical farms and vertical farming has accelerated rapidly over the past several years.

Three factors overlap in the background. There is oil money, crops can be produced even in environments unsuited to agriculture, and there is a desire to control food security domestically—regions where these three points align are rare even on a global scale.

When interest in food security rises, inquiries about vertical farms tend to increase. As happened during the pandemic, similar movements occur each time tensions rise in the Middle East.

Vertical farming is not a technology for “lowering” transport costs, but a technology for “eliminating” the need for transport itself. Even if logistics stop, production can continue inside the facility.

For the Middle East, that is not a matter of business choice, but of food security.

There are concrete examples already in operation. In the UAE, a vertical farm called “Greeneration,” built with a $5 million investment, is in operation between Dubai and Abu Dhabi. Greeneration cultivates 70 varieties and supplies more than 350 restaurants and hotels. In its early days, it reportedly recorded monthly growth of 15 to 20% (Vertical Farm Daily, 2026).

There is another Middle East-specific factor I want to touch on: the cost structure.

It is often said that vertical farms incur high electricity costs. But in desert regions, open-field farming itself is difficult, and the cost of making open-field farming viable in desert regions is also considerable. There are regions where the “high-cost” disadvantage of vertical farms becomes relatively small. The Middle East is the leading example. The Middle East offers an environment where vertical farming can succeed as a business by a logic different from Japan’s.

There Is Also a Dilemma

That said, I want to be honest about something.

Many of the equipment and materials for vertical farms are imported. For example, LEDs, control systems, growing media, and piping. Most materials arrive by sea, and the worldwide rise in logistics costs is not limited to air transport. As geopolitical risks grow, the impact will be felt across procurement as a whole, including maritime shipping.

Even if you try to build a new vertical farm in order to break free from transport dependence, the construction cost itself is affected by the logistics crisis.

Saying “that’s why vertical farms are the answer” while ignoring this dilemma is disconnected from the reality on the ground.

For companies and investors, one possible judgment is to procure equipment before logistics risks rise further. Another direction is to increase the share of parts that can be produced domestically or sourced locally.

Either way, it is too late to start thinking once the crisis has arrived. Building procurement, production, and logistics structures in peacetime is a common challenge not only for vertical farms but for protected cultivation and the food supply industry as a whole.

Recently, there was another piece of news that caught my attention. The ceasefire agreement between the United States and Iran is expected to temporarily reopen the Strait of Hormuz. However, the fertilizer industry is warning that “supply risks for hydrocarbons will be long-term” (Hortidaily, 2026).

The Strait of Hormuz is a route through which more than 30% of global fertilizer trade and 50% of sulfur trade pass. Natural gas accounts for more than 70% of the production cost of nitrogen fertilizer, so instability in this strait alone is enough to send fertilizer prices soaring. Open-field agriculture and greenhouse agriculture are equally affected.

On the question of fertilizer price impact, I want to mention vertical farms as well. Because vertical farms use recirculating nutrient solution management, they have an easier time controlling the use of fertilizer compared to open fields. Vertical farms have the weakness of depending on imports for equipment and materials. On the other hand, when it comes to managing fertilizer and water, they are structured to be less affected by the external environment.

Beyond the disadvantage of “high electricity costs,” there is also the aspect that fertilizer and water are easier to manage. The cost structure of a vertical farm cannot be described from just one side.

Summary

The spike in air cargo rates can be read as a news story about logistics costs, but in the Middle East context, it can be read as a “structural problem of food security.”

Even with oil, a country cannot function without food. Against the question of how to secure food security, investment in vertical farms can be one answer. That this movement is accelerating in the Middle East is, you could say, a structural inevitability.