The ongoing conflict in Iran is sending shockwaves through the global fertilizer market, raising fears of rising food costs. Iran, one of the world’s largest producers of fertilizers, has seen production and exports disrupted, with the Strait of Hormuz—a critical shipping route—at the center of the tension.
About 35% of global urea exports pass through this waterway. Urea, a key nitrogen fertilizer, underpins roughly half of the world’s food production. Disruptions in supply could lead to higher prices for bread within six to ten weeks, with eggs and meat potentially affected in the following months, according to food systems expert Raz Patel.
The war has already triggered sharp price increases. Urea prices in the Middle East jumped by roughly $130 per ton, reaching $575–$650, while Egyptian export prices rose to $610–$625 per ton. European ammonia futures similarly surged, with April shipments trading at $725 per ton—$130 higher than mid-February levels.
Industry leaders warn of broader consequences. Svein Tore Holsether, CEO of European fertilizer giant Yara, emphasized that crop yields could fall by up to 50% in the first harvest if fertilizers are unavailable. “Focus on oil and gas prices often overshadows the impact on the fertilizer industry,” he said.
The crisis could surpass the global food price shock caused by Russia’s invasion of Ukraine in 2022. Then, energy and fertilizer costs soared, driving food prices to record levels. This time, the blockade of the Strait of Hormuz creates a direct physical barrier, potentially amplifying the impact globally.
Production has already been affected. QatarEnergy halted sulfur, ammonia, and urea output at its Ras Laffan complex after a drone strike on Monday. Iran has shut down its ammonia production, and other regional producers are considering cuts due to shipping disruptions.
Rising natural gas prices add further pressure. Gas, essential for producing nitrogen-based fertilizers, has doubled in cost in Europe—from $10.6 per mmbtu last Friday to over $20 per mmbtu by Monday—raising production costs significantly.
