Iran War Upends Global Agriculture by Delaying Key Chemicals

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Written by Sharun Anthony and Jennis Jacob for IIR News Intelligence (Sugar Land, Texas)

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Summary

The military conflict spreading across the Middle East is posing a major risk to agriculture, as the production of fertilizer and other major components is threatened by shipping issues.

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War Constrains Supply from Key Region

The global agricultural industry is facing significant setbacks in its fertilizer supply amid the U.S.-Israeli conflict with Iran, which has spread to other countries in the Middle East. The region, which is a leading supplier of key agricultural chemicals, is experiencing severe disruptions amid persistent violence.

The Middle East has long dominated global agricultural supply due to its low feedstock prices, advanced port infrastructure, clean fertilizer initiatives, and alignment with regulations such as Europe's Carbon Border Adjustment Mechanism (CBAM). Countries like the United Arab Emirates (UAE), Qatar, Saudi Arabia, Oman and Iran produce the bulk of the world's urea, sulfur and ammonia.

The region faces rising risks of plant closures and supply chain challenges. The recent closure of the Strait of Hormuz (through which 25% to 35% of the global ammonia and urea output is transported), alongside conflicts in and around the Red Sea, has further intensified the crisis. Agricultural economies such as India and Brazil, which depend heavily on Middle Eastern fertilizers, could face price volatility and supply risks if the war escalates and their stockpiles deplete.

Top Export Destinations By 2025

The Middle East's major fertilizer export destinations by 2025 were Africa, India, Southeast Asia and Europe. According to the Green Gubre Group, while West African countries such as Togo, Nigeria and Ghana imported urea and NPK blends from Iran, Oman and the UAE, India stood as the top importer of urea from Iran, Qatar and Oman.

Southeast Asian countries like Indonesia, Vietnam, and Philippines imported granular urea and ammonia, and Europe imported CBAM-compliant products from Saudi Arabia and the UAE.

The Attack & Following Route Disruptions

Since the conflict began February 28, top ammonia, urea and sulfur-producing areas like Kermanshah and Shiraz have been affected significantly. Both the Strait of Hormuz and the Red Sea routes are experiencing blockades.

About one-third of the global seaborne trade in fertilizers passes through the Strait of Hormuz, which has been almost entirely closed, impacting global shipping and increasing the risk of agricultural distress in developing nations.

Houthi attacks in the Red Sea have further disrupted the shipping of phosphates and fertilizers from Jordan, Egypt and Morocco. This has forced the vessels to reroute, causing massive delays and hikes in freight costs.

Effects on Prices

Fertilizer prices, especially urea, rose about 18% in early 2026 from January levels before the conflict in Iran escalated to violence. This hike was driven primarily by supply constraints in the Middle East. Post-conflict surges have been sharper, rising as much as 35%, risking input costs for farmers and higher food prices amid planting seasons globally.

Affected Importers

Major import-dependent countries like India, Brazil and West Africa are at risk of experiencing fertilizer shock if the disruptions continue.

India faces 20% to 25% supply chain exposure alongside significant LNG cuts, leading to potential shutdowns. IFFCO, a major Indian fertilizer producer, is likely to pause operations and/or reduce output, stemming from a cut in LNG supplies of up to 40%. This also threatens the kharif planting season in India, which begins in June or July.

Brazil depends heavily on Gulf-sourced urea for about 40% of its nitrogen requirements. A prolonged conflict is likely to impact fertilizer deliveries ahead of Brazil's 2026-27 crop cycle, with planting typically beginning in September. Soy and maize yields stand at risk if the disruptions continue.

West African nations (like Nigeria, Togo and Ghana) rely heavily on imported nutrients, particularly urea and phosphate, as African production is only concentrated in a few nations (such as Algeria, Egypt and Morocco). West Africa is facing severe supply bottlenecks, given high shipping costs (which have increased 25% to 30%), rising fertilizer prices, and potential shortages of natural gas.

What the Data Says

Industrial Info's Global Market Intelligence (GMI) is tracking activity at 59 ammonia-production plants, 45 sulfur-manufacturing plants and 28 urea-manufacturing plants that are operational in the Middle East. The urea and ammonia plants have annual operational capacities of 3.55 million and 2.84 million metric tons, respectively. Additionally, an annual operational capacity of 750,000 metric tons is being tracked for sulfur.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Chemical Processing Plant Database can learn more about these facilities--including capacities, investment values and necessary equipment--from a detailed list of plant profiles.

Key Takeaways

• The Middle East faces rising risks of plant closures and supply chain challenges.
• Top ammonia, urea and sulfur-producing areas have been affected significantly by the blockade.
• Major import-dependent countries like India, Brazil and West Africa are at risk of experiencing fertilizer shock if the disruptions continue.

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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 News Intelligence) 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 more than 250,000 current and future projects worth $30.2 trillion (USD).