Global fertilizer markets feel impact of conflict in the Middle East

The current conflict in the Middle East, and its effects on shipping and access to the Strait of Hormuz, is disrupting global fertilizer markets, raising prices and tightening supply across global agriculture. About 25%-30% of the world’s nitrogen fertilizer exports pass through the Strait of Hormuz and vessel traffic through the Strait is now reduced to a trickle, with further disruptions across the Gulf, North Africa, and the Eastern Mediterranean. Within 48 hours of the first strike on Iran, North African urea prices surged by nearly 20% and EU natural gas jumped by ~45%, underscoring the region’s critical role in global fertilizer flows. The shock is already both deeper and more complex than disruptions seen in the Strait and broader region following the 12-day Israel-Iran war in 2025.

The key uncertainty now is whether the impact remains transitory or becomes structural – which will hinge on the duration and potential escalation of the conflict. A rapid de‑escalation would contain the damage to short‑term volatility. But there is the risk of more lasting tightening: A ~30% rise in ammonia prices or ~20% rise in sulphur prices would push phosphate producers into severe margin pressure, while a persistent 20%-30% premium of global urea over Chinese prices could further delay Chinese exports. At the very least, a war‑risk premium seems inevitable.