Fertilizer has quietly become another victim of the Iran war, with supply disruptions through the Strait of Hormuz driving sharp price increases and raising fresh concerns about crop yields and food security later this year.
Around one-third of the global seaborne fertilizer trade normally passes through the narrow waterway along Iran’s southern coast. Since the conflict intensified more than two weeks ago, shipping has been severely restricted, with several vessels hit by projectiles and traffic effectively halted for most international carriers. The resulting squeeze has pushed up costs for key fertilizers at a moment when farmers in the northern hemisphere are preparing for spring planting, and those in the south are harvesting.
Analysts tracking the market were quoted by CNBC as saying that the cost of FOB granular urea in Egypt, a widely watched benchmark for nitrogen fertilizers, has climbed to around $700 per metric ton, up from $400 to $490 before the war. Oxford Economics’ Alpine Macro noted in a Monday report that urea prices have surged about 50% and ammonia prices about 20% since hostilities started. Potash and sulfur have also moved higher.
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Chris Lawson, vice president of market intelligence and prices at CRU, said the Middle East is a major exporter of urea and other nitrogen products.
“With the Strait of Hormuz essentially cut off, there’s a big chunk of global trade that isn’t able to move right now,” he said. “We estimate around 30% of exportable suppliers are not really available to the market right now — that includes Saudi Arabia, Qatar, Bahrain and Iran.”
Iran itself is one of the world’s largest exporters of nitrogen-based fertilizers. Lawson added that roughly 30% of the global urea trade originates from Iran and the Hormuz-constrained countries.
“There’s a lot of traded supply that is at risk,” he said.
The timing could hardly be worse. Farmers in the northern hemisphere are entering the critical window for spring fieldwork, while those in the south are bringing in harvests before winter. Nitrogen fertilizers like urea must be applied every season — unlike potash or phosphates, which can sometimes be skipped.
“You can skip a season of potash, you can skip a season of phosphates, but you can’t skip a season of nitrogen,” said Dawid Heyl, co-portfolio manager for the Global Natural Resources strategy at Ninety One. “There’s a direct correlation to your nitrogen application and your agricultural yield in the end.”
Heyl said he is more concerned about this crisis than the one that followed Russia’s 2022 invasion of Ukraine. At that time, Russia and Ukraine were major fertilizer exporters, but the current situation affects a broader group of producers and hits nitrogen supply more directly.
“This, to me, is starting to feel like it could be worse, because it could really have an impact on agricultural yields across a lot of geographies, and across the major crops such as maize and other big ones,” he said.
Sarah Marlow, global head of fertiliser pricing at Argus, agreed the impact could exceed that of the Russia-Ukraine war.
“Almost 50% of all globally traded sulfur comes from that region. For urea, it’s around a third of all globally traded urea that comes from that region and for ammonia, it’s close to 25%,” she said. “So, it’s huge. It’s very significant — and more significant in some ways than the impact of Ukraine because it is affecting multiple producers.”
Fertilizer production itself has been disrupted. QatarEnergy announced it would stop downstream production of urea after halting liquefied natural gas output. China, another major exporter, has imposed restrictions on fertilizer exports to protect its domestic market, according to Reuters.
Against this backdrop, demand for Nigerian Dangote fertilizer has surged lately, Bloomberg reported, quoting Devakumar Edwin, vice president of Dangote Industries Limited. The development exposes the West African country, already dealing with a hunger crisis, to more risks. The Nigerian government has been urged to be proactive and protect the interests of Nigerian farmers by securing adequate fertilizer supplies from Dangote.
Heyl noted that global stocks of basic food commodities entered 2026 at relatively comfortable levels, providing some buffer. A hypothetical 5% drop in yields would not necessarily lead to widespread starvation, but it would almost certainly drive food inflation, particularly in emerging markets.
“Unfortunately, the poorer countries in the world are quite often more exposed to these crises,” he said. “I think some of the African nations that import a lot of grains, for instance, are going to be impacted.”
India, which imports both nitrogen fertilizers and the natural gas used to produce them, also faces significant exposure.
Even the United States is not fully insulated. According to the Fertilizer Institute, about one-third of the nitrogen, phosphate, and potash used in the U.S. is imported.
“It’s going to be inflationary for the farmer,” Heyl said. “Are there going to be certain regions that can’t get their hand on the fertilizer or have to ration?”
Last week, 54 U.S. agricultural groups sent a letter to President Donald Trump calling for “much-needed market relief for America’s farmers” as fuel and fertilizer prices surge.
“As planting season began in earnest across much of the U.S., the closure of the Strait of Hormuz sent fuel and fertilizer prices skyrocketing,” the groups wrote. “Maritime freight disruptions from the ongoing conflict in Iran pose significant consequences to food security here at home and around the world.”
The fertilizer market was already tight before the conflict. Sulfur supplies were structurally short, and prices had peaked in January. With additional production now offline and exports blocked, Marlow said further price spikes are possible.