The sharp rise in oil and gas prices, along with disruptions to navigation in the Strait of Hormuz since the start of the U.S.-Israeli war on Iran, has drawn significant attention from global markets and media due to its wide-ranging economic impacts.
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However, the importance of the Strait of Hormuz—through which about 20% of global oil and liquefied natural gas supplies pass—extends beyond the energy sector to other critical industries, including fertilizers, which are essential for global food production.
According to Reuters, around one-third of global fertilizer trade flows through the Strait of Hormuz. These supplies have declined following the outbreak of the Iran war and the targeting of gas facilities in Gulf countries, leading to the shutdown or disruption of fertilizer plants.
The fertilizer industry relies heavily on natural gas, which accounts for about 70% of its production inputs.
The disruption of Gulf fertilizer supplies has quickly impacted countries worldwide, many of which are now facing simultaneous shortages of both fertilizers and gas.
Fertilizers account for about 50% of grain production costs in some countries, according to data from the UN Food and Agriculture Organization (FAO), which warned of the broad effects of rising fertilizer costs on living expenses, especially in low-income countries.
Losers:
India and Bangladesh
India is among the biggest losers from the disruption of Gulf fertilizer supplies, as it imports about 40% of its urea and phosphate needs from the Middle East, according to Reuters. Before the war, it had contracted to purchase 1.3 million tons of urea from the region, some of which has yet to be delivered.
As the world’s most populous country, India represents a massive market for urea imports to meet agricultural demand, alongside domestic production. However, it has been forced to reduce output at three major fertilizer plants due to halted LNG shipments previously imported from Qatar.
Similarly, Bangladesh has shut down 4 out of its 5 urea production plants for the same reason—disruptions in LNG supplies needed for production after the outbreak of the Iran war.
Reuters noted that Asian countries such as Bangladesh and Pakistan, as well as African nations like Somalia and Kenya, lack large fertilizer stockpiles, meaning they will be directly affected by rising import costs of urea and phosphate.
Brazil and Australia
Brazil relies almost entirely on imported urea to support its vast agricultural production, with most imports passing through the Strait of Hormuz, making it highly vulnerable to the current crisis.
Australia imports more than 60% of its urea needs from the Middle East, according to Reuters, and is therefore expected to be significantly affected by declining Gulf supplies. Farmers in Australia are already facing shortages of fertilizers in local markets.
China has imposed restrictions on fertilizer exports during the current crisis to secure supplies for its domestic farmers, sacrificing export revenues in the process.
Global urea exports are expected to drop to about 1.5 million metric tons in March, compared to around 3.5 million tons before the war—without Chinese supply—or between 4.5 and 5 million tons with Chinese exports, according to Reuters citing Scotiabank.
Winners of the crisis
Fertilizer prices in the Middle East have surged by more than 40% since the outbreak of the Iran war, exceeding $700 per metric ton, up from less than $500 before the conflict, according to data from Argus, a commodities pricing agency.
Russia is among the biggest beneficiaries of rising fertilizer prices, as it is the world’s largest fertilizer exporter, despite facing production chain challenges due to the war in Ukraine.
Canada and the United States, also major fertilizer exporters, have benefited as export prices increased by 32% since the start of the war in the Middle East.
Experts told Reuters that fertilizer prices could rise by as much as 100% within weeks if the conflict in the Gulf persists and the Strait of Hormuz remains closed.
The UK’s The Guardian noted that Russia, the United States, and Canada—major natural gas exporters—have benefited from rising gas prices as well, achieving what could be described as “double gains.”
Morocco is also among the winners, as it is one of the world’s largest phosphate producers, holding about 70% of global phosphate reserves. Its fertilizer exports to European Union countries exceeded $1 billion in 2025, according to data cited by Trading Economics based on UN analysis.
