Gulf Fertilizer Crisis: Food Security Risks & Hormuz Blockade

A third of the global trade in raw materials for fertilizer passes through the strait of Hormuz, a vital maritime choke point, raising concerns about potential disruptions to food security amid ongoing conflict in the region. The waterway is also a key route for 20% of natural gas shipments, essential for fertilizer production.

Fertilizer Supply Threatened by Strait of Hormuz Disruptions

The near-total shipping blockade of the strait of Hormuz is a “food security timebomb,” according to David Miliband, head of the International Rescue Committee. He warned that “the window to avert a massive global hunger crisis is rapidly closing.”

The World Trade Organization has identified fertilizers as the “No 1 issue of concern,” while the UN World Food Programme anticipates a record number of people facing acute hunger this year if the current conflict continues.

The Gulf region is home to some of the world’s largest fertilizer factory sites, and a prolonged transport shutdown could disrupt production and increase costs, international organizations have cautioned. Approximately 16 million tonnes of fertilizers were transported by sea from the region in 2024, according to the UN Conference on Trade and Development.

Iran is the fourth-largest global exporter of urea, the most widely used nitrogen fertilizer, following Russia, Egypt, and Saudi Arabia. The Middle East also provides about 45% of the world’s trade in sulphur, a key raw material for fertilizer manufacture, as well as various metals and industrial chemicals.

Since Iran began threatening attacks on shipping, only a limited number of vessels carrying ammonia, nitrogen, and sulphur – vital ingredients in synthetic fertilizers – are transiting the strait. The Qatar Fertiliser Company (QAFCO), the world’s largest single-site urea exporter and supplier of 14% of global urea, has been offline for almost a month following Qatar’s closure of its gas plants after Iranian strikes.

Doha lacks alternative export routes for urea and also relies on shipments through the strait for food imports for itself and the neighboring United Arab Emirates.

Roughly half of global food production depends on synthetic nitrogen fertilizer. Without it, crop yields would decline, increasing prices of staples like bread, rice, potatoes, and pasta, and raising the cost of animal feed. Some of the world’s poorest countries are particularly vulnerable to fertilizer price increases.

Farmers are facing a “double shock” from surging prices for fertilizer and fuel, according to the UN’s Food and Agriculture Organization, which also fears a lengthy closure of the strait could limit global supplies.

Egyptian urea prices, a benchmark, have risen by more than 60% to $780 (£586) a tonne, up from about $484 in late February, according to the CRU Group. While prices haven’t yet reached 2022 levels, analysts caution they remain under pressure.

The fertilizer market is currently “in paralysis waiting for the conflict to end,” said Chris Lawson, vice-president of market intelligence and prices at CRU. While supply disruption has occurred, it is not as severe as it could be.

Some fertilizer buyers are delaying purchases, hoping prices will drop once the conflict ends and normal trade resumes.

A U.S. move to loosen sanctions on Belarusian potash producers and suspend sanctions on Russian oil is not expected to significantly increase global fertilizer supplies, according to analysts.

Russia continues to export fertilizer to countries outside Europe and North America and has limited capacity to increase production.

The impact of fertilizer price increases varies by nation, depending on their reliance on Gulf imports and the timing of the conflict relative to the agricultural cycle. European and North American farmers had largely secured fertilizer for the spring planting season, but countries like Australia, India, Sri Lanka, Pakistan, Bangladesh, and several African nations are heavily reliant on Gulf fertilizer imports.

While global food prices haven’t yet risen significantly, as the Middle East isn’t a major exporter of wheat and other crops, a prolonged disruption to trade routes could have serious long-term consequences.