Market AnalysisMar 26, 20262 Min

Strait Of Hormuz Disruption Is Not Just About Oil And Gas: This Commodity Is Feeling The Heat Too

The Strait of Hormuz has long been a chokepoint for global oil flow. The disruptions on this route have often been framed as an oil story. But that is just a part of the canvas. While the Middle East tensions have put global energy markets on edge, now the disruption is slowly spilling onto another vital area — fertiliser supplies.

The Strait of Hormuz is a crucial link in the global food chain and fertiliser exports. With key suppliers dependent on this route, even the slightest of bottlenecks is enough to push up input costs and eventually lead to food inflation.

The waterway has been severely disrupted since the start of the US-Israel war on Iran, with traffic effectively coming to a halt and several ships being hit by projectiles in or near the route.

As a result, fertiliser prices have surged in response to the supply shock. As of March 25th this year, FOB granular urea prices in Egypt, a key benchmark for nitrogen fertilisers, have jumped to around $700 per metric ton, from $400 to $490 before the start of the war, said experts.

Choke Point For Global Fertiliser Trade

• One-third of the global seaborne fertiliser trade passes through the route, as per the United Nations.
• Since the US and Israel launched strikes on Iran in February, the price of fertilizer, much of which is produced in the Middle East, has witnessed a sharp rise.
• Urea and ammonia prices have risen by about 50% and 20%, respectively, since the war began, according to Oxford Economics’ Alpine Macro.
• Prices of other fertilisers, such as potash and sulphur, have also moved higher.

Supply Shock At The Worst Possible Time

The timing of the disruption could not be worse. Farmers in the Northern Hemisphere are heading into the crucial spring months, when fertilising activity typically ramps up.

Urea, one of the world’s most widely used fertilisers, plays a huge role in the growth of crops such as maize, wheat, rapeseed and various fruits and vegetables. The Middle East remains a major exporter of urea and nitrogen products.

At the same time, farmers in the Southern Hemisphere are in the middle of harvesting before winter.

The supply chain remains long and interconnected. If farmers are unable to access sufficient urea, crop yields are likely to decline.

Production Disruptions Add To Supply Strain

The supply squeeze is not just about shipping bottlenecks. Fertiliser production itself is also under pressure.

• Limited storage options are affecting products that cannot be shipped.
• Some energy facilities in the Middle East have been shut down.

Earlier this month, QatarEnergy said it would halt downstream urea production after stopping liquefied natural gas output.

What Experts Are Saying

“With the Strait of Hormuz essentially cut off, there’s a big chunk of global trade that isn’t able to move right now. We estimate (that) around 30% of exportable suppliers are not really available to the market right now. There’s a lot of traded supply that is at risk — 30% of global urea trade comes out of Iran and the Hormuz-constrained countries,” Chris Lawson, vice president of market intelligence and prices at CRU, told CNBC.

“Nitrogen is the one element that you need to get to the plant every single year. You can skip a season of potash, you can skip a season of phosphates, but you can’t skip a season of nitrogen,” Dawid Heyl, co-portfolio manager for the global natural resources strategy at Ninety One, was quoted as saying.

“Almost 50% of all globally traded sulphur comes from that region. For urea, it’s around a third… and for ammonia, it’s close to 25%. So, it’s huge,” Sarah Marlow, global head of fertiliser pricing at Argus, said.

Why It Matters

The ripple effects are already raising concerns about food security.

Ninety One’s Heyl said global markets entered 2026 with relatively high stockpiles of key food commodities, which could act as a buffer against immediate shortages of corn, wheat, soybeans, and rice.

Countries dependent on grain imports, particularly in Africa, could face the heat. But the impact is not limited to developing economies. The United States, despite producing a large share of its own nitrogen fertilisers, still relies on imports.

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