Severe droughts across the Northern Hemisphere—stretching from the farms of California to waterways in Europe and China—are further snarling supply chains and driving up the prices of food and energy, adding pressure to a global trade system already under stress.

Parts of China are experiencing their longest sustained heat wave since record-keeping began in 1961, according to China’s National Climate Center, leading to manufacturing shutdowns owing to lack of hydropower. The drought affecting Spain, Portugal, France and Italy is on track to be the worst in 500 years, according to Andrea Toreti, a climate scientist at the European Commission’s Joint Research Center.

In the American West, a drought that began two decades ago now appears to be the worst in 1,200 years, according to a study led by the University of California, Los Angeles.

Researchers compare droughts by measuring the growth of annual tree rings that reflect rainfall and temperature from year to year in specific areas. Climate scientists say this year’s dry spells are partly due to La Niña, a cyclical pattern of cooler water in the eastern Pacific Ocean that pushes the atmospheric jet stream northward, leaving parts of Europe, the U.S. and Asia with less rain. The United Nations says the number of droughts worldwide has risen 29% since 2000 due to land degradation and climate change.

For some of the world’s biggest economies, this summer’s droughts are hurting industries including electricity generation, agriculture, manufacturing and tourism. That is compounding existing strains such as supply-chain disruptions stemming from the Covid-19 pandemic and pressure on energy and food prices from the war in Ukraine.

In the U.S., agricultural forecasters expect farmers to lose more than 40% of the cotton crop, while in Europe the Spanish olive-oil harvest is expected to fall by as much as a third amid hot and dry conditions.

In Europe, rivers such as the Rhine and Italy’s Po that serve as arteries for trade are running at historic lows, forcing manufacturers to cut shipments. Falling river levels also have reduced hydropower generation across the continent, affecting a key alternative source to natural gas, which is in shorter supply as Russia squeezes flows.

Heat has forced France to lower production at several nuclear reactors because the river water that cools them is too warm. And Germany, Europe’s biggest consumer of Russian gas, plans to burn more coal instead of gas to generate electricity, but low levels on the Rhine are holding back shipments.

Meager snowfall at the river’s source in the Swiss Alps and reduced rainfall downstream have lowered water flow in the Rhine Delta in the Netherlands. That has allowed seawater into the nation’s system of locks and dams, slowing river traffic and seeping into reservoirs used for drinking and agriculture. Drought is also drying out and weakening earthen dikes that protect low-lying areas of the Netherlands from the North Sea.

Eleven inches of rain had fallen in much of the country this year by early August compared with the usual 16, leaving the Rhine so low in places that it is snarling exports from German manufacturers clustered upriver.

“Everything is hurting Germany more than anywhere else, that’s a common theme,” said Andrew Kenningham, chief Europe economist at Capital Economics in London.

In the U.S., smaller snowpacks in the Sierra Nevada mountains of California have sharply reduced water supplies in the region, home to the nation’s largest agriculture industry. Officials of the Westlands Water District in the Central Valley, the state’s most important agricultural region, say roughly a third of the 600,000 farmland acres there are being left unplanted this year because of water shortages.

The Colorado River has fallen so much that the U.S. Bureau of Reclamation on Aug. 16 declared a second consecutive annual shortage, triggering a second straight year of mandatory water cuts to Arizona, Nevada and Mexico.

California’s Lake Mendocino during a drought that has choked off water supplies to cities and farms.

n Yuma County, Ariz.—a major producer of lettuce, baby greens and other vegetables—farmers expect a hit of as much as 10% to their $3.4 billion-a-year industry, said Wade Noble, general counsel for four irrigation districts there.

“It’s less income into the area,” Mr. Noble said. “It’s less buying and selling.”

In central and southwestern China, authorities declared a drought in six provincial-level jurisdictions, which together accounted for a fourth of China’s grain output last year.

The southwestern province of Sichuan has been hit the hardest by lower rainfall, as it relies heavily on hydropower for electricity. Soaring temperatures have driven up demand for air conditioning, threatening to overload the power grid.

On Sunday, local authorities activated the highest emergency response amid the power-supply crunch, extending an order from last week to many factories to shut down or scale back production to “leave electricity for the residents” until Thursday, when temperatures are set to drop again.