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 item reporting that the effective closure of the Strait of Hormuz due to the Iran war pushed international air cargo freight rates up by as much as 95% (Hortidaily, 2026).

The size of that number is 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 ratio.

They have oil, but no food

Saudi Arabia, the UAE, Qatar — these are some of the world’s leading oil-producing countries, yet they import most of the food they consume domestically.

A climate and soil unsuited to agriculture, and chronic water shortages. It is simply not an environment where you can mass-produce food in open fields.

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

A crisis in the Strait of Hormuz — the waters off the Gulf states, including the UAE — shakes the very structure that lets oil revenue underwrite food imports. This isn’t the usual “when transport costs rise, growing locally gets relatively cheaper” story. It is that the risk of food simply no longer arriving starts to feel real.

Why the Middle East is turning to vertical farms

In the UAE, Saudi Arabia, and Kuwait, investment in vertical farming has advanced rapidly over the past few years.

Behind this, three factors overlap. There is oil money, crops can be produced even in an environment unsuited to agriculture, and there is a desire for domestic control over their food supply and food security — regions where these three things line up are few, even on a global scale.

When food-security worries flare, inquiries about vertical farms tend to increase. Just as happened during the COVID pandemic, the same thing happens every time tensions in the Middle East rise.

A vertical farm is not a technology for “lowering” transport costs; it is a technology for making transport itself “unnecessary.” Even if logistics stop, you can keep producing inside the facility.

For the Middle East, that is not a management option; it is a matter of food security.

There are cases actually in motion. In the UAE, a vertical farm called “Greeneration,” with USD 5 million invested, is operating 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).

Beyond this kind of private investment, a clear message has begun to emerge at the level of government bodies as well. In April 2026, the Sharjah Agriculture and Livestock Authority in the UAE declared that a “modern golden age” was arriving in the agriculture and food sector. It signaled a policy of promoting a framework of cooperation among diverse service providers, research institutions, and development platforms. A stance of backing agricultural investment as policy is being made explicit by government bodies (Vertical Farm Daily, 2026).

There’s one more thing specific to the Middle East worth mentioning: cost structure.

It is often said that vertical farms run up high electricity bills. But in desert regions, open-field farming itself is difficult, and the cost of making open-field farming work in a desert region is also considerable. There are regions where the disadvantage that “vertical farms are high-cost” becomes relatively smaller. The Middle East is foremost among them. The Middle East has an environment where, by a different logic than in Japan, a vertical farm is more likely to succeed as a business.

There is also a dilemma

That said, there is something I want to write down honestly.

Much of a vertical farm’s equipment and materials are imported. For example, LEDs, control systems, growing media, and piping. Most materials arrive by sea freight, but the global rise in logistics costs is not limited to air. If geopolitical risk rises, the impact reaches the whole of procurement, including ocean shipping.

Even if you try to build a new vertical farm for the purpose of escaping dependence on transport, the construction cost itself is affected by the logistics crisis.

To ignore this dilemma and say only “and that is why vertical farms” is to be out of step with the reality on the ground.

For companies and investors, there is a possible judgment that equipment should be procured before logistics risk rises further. Or there is the direction of increasing the share of components that can be domestically produced or locally sourced.

Either way, it is too late to start thinking once a crisis has already hit. Putting procurement, production, and logistics systems in place in normal times is a challenge shared not only by vertical farms but by protected cultivation and the entire industry involved in food supply.

Recently there was one more piece of news that caught my attention. With a ceasefire agreement between the US and Iran, the Strait of Hormuz is expected to reopen temporarily. However, the fertilizer industry warns that “the risks to hydrocarbon supplies will be prolonged” (Hortidaily, 2026).

The Strait of Hormuz is a route through which more than 30% of the world’s fertilizer trade and 50% of the sulfur trade passes. Because natural gas accounts for more than 70% of the production cost of nitrogen fertilizer, the mere instability of this strait sends fertilizer prices soaring. Open-field agriculture and greenhouse agriculture are affected equally.

Fertilizer prices are another angle where vertical farms are worth a look. Because vertical farms adopt recirculating nutrient solution management, they make fertilizer use easier to control than in open fields. Vertical farms have the weakness of being prone to 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 bills,” fertilizer and water are also easier to manage. The cost structure of a vertical farm cannot be judged from one side alone.

Summary

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

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