Fertilizer Market Disruption: Gulf Tensions Threaten Global Food Supply
Escalating tensions in the Gulf region are creating a novel shockwave for the global food supply, reminiscent of the disruptions following Russia’s invasion of Ukraine in 2022. Analysts are now recognizing the interconnectedness of global markets and the potential for cascading consequences when key trade routes are threatened. The primary concern centers on the Strait of Hormuz, a critical chokepoint for fertilizer exports, and the potential for increased costs, and scarcity.
The Strait of Hormuz: A Vital Hub
The region between Iran and the Arabian Peninsula accounts for 14.4% of the world’s fertilizer exports by value, according to data from the International Trade Center [International Trade Center]. It is the second-largest exporting region globally, trailing only Russia, which holds a 22.4% market share. A significant portion of key agricultural products, including approximately one-third of urea, nearly half of nitrogen fertilizer, and substantial quantities of ammonium phosphate, transit through the Strait of Hormuz. Major importers of these fertilizers include India, the United States, Brazil, and Australia.
Exports Paralyzed, Prices Surge
Current disruptions are already impacting the market. Exports are being hampered by increased risks in the Strait of Hormuz, leading to higher freight and insurance costs. As of early March 2026, urea prices at the Chicago Board of Trade have risen by 26% in a week and 64% since December 2025, reaching levels not seen since November 2022 [Chicago Board of Trade]. This surge mirrors the price increases experienced after the initial invasion of Ukraine.
Ripple Effects on Food Prices
If the current disruptions persist, a new cycle of price increases across the food chain is likely. Hydrocarbons currently account for roughly half the cost of producing wheat or corn, with fertilizers contributing approximately one-third and transportation the remainder. A prolonged blockade of the Hormuz Strait could lead to price increases similar to those seen in 2022, when tensions following the war in Ukraine drove fertilizer prices to nearly double their current levels. While cereal prices are currently lower than in 2022, they have already appreciated by 15% in the last month.
Russia Seeks Opportunity
Russia is positioned to potentially benefit from the current situation, given its significant role in the global fertilizer market. Unlike oil, there are limited strategic reserves of fertilizers worldwide. Following the 2022 invasion of Ukraine, Russia’s importance as a fertilizer supplier became apparent, and some countries are already taking steps to secure future supplies. Nigeria and Ghana have reportedly placed advance orders for Russian fertilizers for delivery in the autumn, accepting higher prices to guarantee availability. Other major cereal-producing nations are likely following suit.
This situation allows Russia to regain some economic leverage, and it is expected to support Iran to further disrupt the global food chain.
March 8, 2026