Fertilizers and Components are Also Blocked Behind Strait of Hormuz

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Written by Paul Wiseman for IIR News Intelligence (Sugar Land, Texas)

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Summary

As much as half of some fertilizers flow through the Strait of Hormuz, which is blocked by Iran. The Northern Hemisphere and the U.S. in particular may be temporarily shielded from resulting higher farm prices--this season.

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Choking Fertilizer Flow

Aside from the biggest Strait of Hormuz issues such as oil and natural gas, there is a looming shortage of possibly even greater concern. Significant amounts of agricultural fertilizers and fertilizer components also flow through the now-restricted Strait. Shortages of these key supplies could affect prices and ultimately, food availability, should hostilities continue.

Components are, including their worldwide production percentage that passes through the Strait:

• Sulfur: ~50%
• Urea: ~30%
• Ammonia: ~25%

Missing from the list is natural gas, which is an important component in making nitrogen-based fertilizers, which make up a large percentage of the fertilizer market.

Industrial Info is tracking 30 operational agriculture chemicals facilities in the seven nations whose shipping is all or mostly behind the Strait--Bahrain, Kuwait, Iraq, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). Subscribers to Industrial Info's Global Market Intelligence (GMI) Chemical Processing Plant Database can view a full list.

That list does not include Iran, who is of course behind the Strait, but is not restricting its own ships' passage. Also, while the eastern shore of Saudi Arabia is behind the Strait, a significant amount of shipping of at least oil and gas can be marketed from the west, away from the Strait.

Food Fights Inflation?

While any restricting of supplies leads to higher prices, this one's effect on food supply could be delayed, say experts. That's because the Northern Hemisphere, which is now in planting mode, stocks up on fertilizer and components in the fall, when demand and prices are lower. So, while farmers in both hemispheres do require some fertilizer in winter--meaning there is still some demand in the south, where harvesting is in full swing--the supplies in both areas are mostly set for this year.

Regarding market prices, a March 23 paper released by Illinois-based farmdocdaily noted, "U.S. markets are relatively insulated in potash and ammonia, but reliance on Gulf-sourced urea and phosphate still leaves them vulnerable at a critical point in the crop calendar."

Most Strait of Hormuz outflows go to less developed countries in the Southern Hemisphere, which produce a smaller percentage of the world's total farm output. The shortages are bad for the people there, but experts believe it will cause less worldwide inflation of food prices than if the shortages were in the U.S. or the EU.

Many analysts hope that the conflict with Iraq will be over before the next planting season in the Northern Hemisphere, but others caution that the end game continues to be promised as short, but keeps getting extended.

The Price is High but We're Holding On

Fear has driven market prices higher--urea futures have risen 70% since January, hitting their highest peak since 2022. But those are futures. Until farmers actually start buying the product, there is not likely to be an effect on food prices.

There have been some U.S. market increases for crops, said the farmdocdaily report, but much less than for oil and gas. "Crop futures also increased, though by a smaller margin (compared to oil and gas market prices), with gains ranging from 3.6% to 8%," it said, referring to the U.S. market.

By the Numbers

• ~50%: Amount of world sulfur supplies behind the Strait of Hormuz
• ~50%: Amount of world sulfur supplies behind the Strait of Hormuz
• ~25%: Amount of world ammonia supplies behind Strait of Hormuz

This Has Happened Before

The last time Israel and the U.S. bombed Iran, on a more limited basis in 2025, it was followed by reductions in nitrogen production in Egypt and Iran. That affected about 15% of worldwide production. And to protect itself against possible Israeli strikes, Iran also closed seven urea and ammonia plants. But this caused only a temporary price spike.

Special Treatment for Fertilizers?

There is hope for this market getting special treatment, as it has in the Russia-Ukraine war. The sanctions that the U.S. and other nations imposed against Russia for its invasion of Ukraine largely exempted fertilizer due to its importance in food supplies and prices. Whether Iran decides to make this exception remains to be seen.

Key Takeaways

• Looming fertilizer shortages could boost inflation eventually--but U.S. crop futures are up only 3.5-8% as of late March.
• Northern Hemisphere farmers generally had already purchased most of the 2026 planting season's fertilizer before the start of "Operation Epic Fury" on February 28, and the U.S. is less dependent on Middle East fertilizer exports than many countries.
• Developing nations in the Southern Hemisphere may be most impacted.

About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).