Strait of Hormuz disruptions risk global fertilizer shortages and higher food costs
Closure or disruption of the Strait of Hormuz after strikes on Gulf facilities has sidelined fertilizer shipments and raised prices, threatening supplies of nitrogen fertilizers and raising costs for staple crops in import-dependent countries.
The potential shutdown of the Strait of Hormuz following strikes on Gulf facilities has sidelined large volumes of fertilizer and precursors and raised fertilizer prices by 10–30%, heightening the risk of supply shortages for nitrogen-dependent crops such as corn, wheat and rice.
The Strait of Hormuz handles about one-fifth of global crude oil and LNG exports, and Gulf nations account for roughly 20% of traded volumes of key fertilizer inputs including ammonia, phosphates and sulfur. Nearly half of traded urea originates in the Gulf region, with Qatar alone supplying about 10% of global urea.
QatarEnergy halted production after Iranian strikes on Ras Laffan, leaving hundreds of thousands of tonnes of fertilizer nutrients and precursors sidelined. UNCTAD reports around 1.33 million tonnes of fertilizer move through Hormuz each month; analysts warn that a 30-day closure could trigger immediate shortages and risks to yields of nitrogen-intensive crops.
Higher fertilizer costs are already affecting markets: prices rose 10–30% since the onset of the conflict, though they remain about 40% below the peak seen after Russia’s invasion of Ukraine. IFPRI experts caution that sustained price increases could force farmers to shift to less nitrogen-intensive crops or reduce fertilizer use, lowering yields particularly in poorer countries with limited access to inputs.
Supply-side relief is limited because other major producers — Russia, China, the United States and Morocco — have limited spare capacity to rapidly raise exports. Nitrogen production requires natural gas or coal feedstocks, and high natural gas prices constrain the ability to increase output quickly.
Energy markets amplify food-cost risks. Brent crude traded around $100 per barrel while diesel prices rose on the US West Coast and in Germany; Asian importers of Gulf oil also faced higher prices. IMF Managing Director Kristalina Georgieva warned a sustained 10% rise in energy prices for a year could add 0.4 percentage points to global inflation and trim up to 0.2 percentage points from global growth.
Joseph Glauber of IFPRI highlighted the linkage between energy and food, noting energy costs account for roughly half of food costs. Higher fuel and fertilizer prices together raise production and transport costs for staple crops, threatening affordability and availability in import-dependent markets.
Import-dependent countries face the greatest immediate risk. India imports up to two-thirds of its nitrogen fertilizer needs from the Gulf; Brazil relies on Gulf-sourced urea for about 40% of its nitrogen supply. Prolonged disruption could harm monsoon-season planting and staple yields that support roughly 1.45 billion people.
Regions with low fertilizer use, including parts of Sub-Saharan Africa, face longer-term yield risks if prices or supplies are constrained. Dutch bank ING warned that extended disruption would tighten fertilizer availability in Brazil, India, South Asia and some EU regions, exacerbating food-security pressures.
Inside Iran, inflation exceeded 40% before the conflict and food prices have continued to rise. Gulf states themselves import 80–90% of their food; a prolonged closure of Hormuz could deplete strategic food reserves within months, leading to rationing or the need to reroute imports via the Red Sea and Gulf of Oman.