How the 2026 Iran War Is Pushing Matcha Prices Higher

By Christian Mauerer, Founder of One with Tea · Published May 7, 2026

If you bought a tin of ceremonial matcha in March and a tin in May and the May tin cost more, the answer is no longer just "the harvest." Since the air war between Israel, the United States, and Iran began on February 28, 2026, the Strait of Hormuz has been largely blocked, Brent crude has held above $113 a barrel, and Japan, which sources roughly 94% of its crude from the Middle East, is sitting in the crosshairs of a supply pipeline it has never been able to fully insulate. Matcha is downstream of all of it.

I source matcha for a small US brand. I have spent the last few months watching invoices move, reading Japanese trade press, and talking to suppliers who are themselves trying to read where the next month is going. Here is what is actually connected, what is not, and what it means for what a bowl of matcha will cost through the rest of 2026.

Why Matcha Producers Care About a Strait Half a World Away

Japan does not produce its own oil. The country is reliant on imports to meet more than 85% of its total energy consumption (CSIS). For crude specifically, the dependence is structural and decades old. Of the roughly 2.34 million barrels per day Japan was importing in early 2026, about 94% came from the Middle East. The Strait of Hormuz, which separates Iran from Oman and the UAE, is the chokepoint through which roughly 93% of those Japan-bound barrels normally pass.

When the strait closes or even partly closes, every barrel that does not arrive in Japan has to be replaced from somewhere else. Replacement barrels from non-Hormuz routes (the Atlantic Basin, West Africa, the US Gulf, Russia where sanctions allow) cost more, take longer to arrive, and require shipping capacity that is itself already stretched. The Japan Times reported in April that the first non-Hormuz oil shipments were expected to begin arriving in Japan in May 2026, but at higher cost than the displaced Middle East volumes. Refineries either pay more for crude or run lower volumes. Either path raises the price of every refined product, including the kerosene and propane that downstream industries (including tea processing) rely on.

Iran controls the eastern shore of the strait. Since late February, the situation has shifted between active conflict, fragile ceasefires, and renewed strikes. As of early May, the US announced a "Project Freedom" naval initiative aimed at restoring commercial navigation, but shipping companies have remained hesitant to commit vessels through the corridor. A major fire at the Fujairah Oil Industry Zone in the UAE following an Iranian drone attack in early May reinforced why operators are cautious (CNN, May 4, 2026).

How Tea Processing Actually Uses Oil

Most casual matcha drinkers picture matcha as a single product (the green powder), but the path from leaf to tin involves several energy-intensive steps. The one that touches oil prices most directly is drying.

After tencha leaves are picked and steamed (usually with electricity or steam-generating boilers), they have to be dried before stone-grinding. A scientific review of tea-sector drying technologies found that drying consumes roughly 3.5 to 6 kWh of thermal energy per kilogram of finished tea, with the heat source typically supplied by fossil fuel combustion (ScienceDirect). Common fuels listed include kerosene, diesel, liquefied petroleum gas (LPG), biomass, and electricity, with the choice typically driven by local availability and cost.

In Japan, kerosene and LPG are widely used in agricultural drying and food processing, including for tea. Both are refined products of crude oil. When crude moves, kerosene and LPG move with it, often with a lag of a few weeks but reliably. A 30% rise in landed crude in Japan does not translate into a 30% rise in a 30g tin (the leaf cost, packaging, certification, and labor are also in the math), but it does add cost pressure to the drying line that ultimately rolls forward into wholesale.

The matcha-specific stone-grinding step, which converts dried tencha into fine powder, is typically electric. Japan's electricity grid is not directly oil-fired in 2026 (the mix is mostly LNG, coal, nuclear, and renewables), so the grinding step is somewhat insulated from a pure oil shock. But Japan's LNG also has significant Middle East exposure historically, and a sustained oil-and-gas crisis tends to lift power prices across the board.

The Freight Layer: Getting Tea From Japan to a US Tin

Even if every Japanese tea factory had perfectly stable energy costs, the next layer in the chain is shipping the finished product from Japan to wholesale buyers in the US, Europe, and Asia. Container vessels run on bunker fuel (a heavy petroleum product). When Brent rises, bunker fuel rises, and container freight rates follow. Trans-Pacific freight in 2026 is materially more expensive than it was in 2024, both because of underlying fuel cost and because some shippers are routing around higher-risk corridors.

For a small US brand like ours, this shows up as freight surcharges on the Japan-to-US leg. The numbers are modest per tin (a small fraction of a dollar), but they stack with the leaf cost move and the kerosene-driven drying cost move. Each layer is a few percent. Together, they account for a meaningful share of the price changes buyers are seeing on the shelf in 2026.

The Yen and the Domestic Cost Cascade

Beyond the direct oil and freight links, there is a second, slower channel: macroeconomic pressure inside Japan.

Japan imports nearly all of its primary energy. When global oil prices surge, Japan's import bill grows quickly, weakening the yen on the foreign exchange market and raising the cost of nearly every imported input that Japanese manufacturers and farmers use. Fertilizer prices rise (much of it imported). Aluminum and tin prices rise (smelting is energy-intensive). Domestic transportation, refrigeration, and storage all rise. For tea producers specifically, the labor pool, the equipment maintenance, the packaging supply, and the certification audits all sit in a Japanese economy where input costs are climbing.

This is part of why honest brands quietly raised prices in March and April rather than waiting for a single dramatic move. The cascade is not sharp. It is slow and structural, and it adds up.

What This Means for the Spring 2026 Harvest

Timing matters more than usual this year. Japan's tencha harvest runs roughly April through May for the first flush across the main production regions of Uji (Kyoto), Nishio (Aichi), Kagoshima, and Shizuoka, with shading windows beginning weeks earlier. The 2026 spring harvest will set the available tencha pool for the rest of the year. The crop itself is not directly affected by an oil shock (tencha plants do not run on kerosene), but the post-harvest drying, the inland transport, the export logistics, and the financing all are.

The most likely scenario for the rest of 2026 is that the leaf-cost pressure from the existing shortage continues, that the oil-and-freight overlay adds another modest cost layer, and that prices on the shelf in the US settle into a higher band rather than spiking and dropping. The brands that adjusted prices honestly through Q1 and Q2 are roughly aligned with the actual landed cost. The brands that held shelf prices are either burning reserves or running quieter quality trades. Both pressures are documented in our companion piece on counterfeit matcha.

There is a tail-risk scenario where the Hormuz situation escalates again, oil spikes harder, and Japanese refiners run shortfalls long enough to ration kerosene and LPG to non-priority sectors. In that scenario, tea-factory drying capacity becomes a real bottleneck and the 2026-2027 supply window tightens further. We are watching it. We are not modeling our default case around it.

How One with Tea Is Tracking This

For full transparency, here is what we are doing on our side.

We hold direct relationships with named Japanese organic-certified farms, which gives us a clearer view into supplier-side cost moves than a brand sourcing through a re-packer. We get notice when a supplier's drying cost moves before the leaf-cost line is updated, and we ask. We adjust our pricing transparently when our landed cost changes meaningfully, rather than waiting for a single sharp move that surprises customers. Same product spec (named prefecture, specified cultivar pool, JAS plus USDA Organic certification), same lot-by-lot heavy-metal and pesticide testing published on our Lab Results page, same drinker-facing quality.

For a fuller view of why prices rose before the Iran situation overlay, see our cost breakdown of the 2026 ceremonial tin. For the structural shortage context, see our 2026 matcha shortage explainer.

If you operate a cafe, restaurant, or brand exploring wholesale during this period, our wholesale program is taking on a small number of new accounts for the 2026 season. We share lab reports, supplier documentation, and frank conversations about what cost pressures are real, what is hype, and how to lock in supply through a volatile year.

Have a question about supply, pricing, or wholesale during the current cycle? Email info@onewithtea.com. I read every message that comes in.