World oil and gas prices have skyrocketed following the US attack on Iran final weekend. However one other key international supply chain can be in danger, one that will instantly influence American farmers who’ve already been squeezed for months by tariff wars. The battle within the Middle East is choking international provides of fertilizer proper earlier than the essential spring planting season.
“This actually couldn’t be taking place at a worse time,” says Josh Linville, the vp of fertilizer at monetary companies firm StoneX.
The worldwide fertilizer market focuses on three predominant macronutrients: phosphates, nitrogen, and potash. All of them are produced in numerous methods, with totally different international locations main in exports. Farmers contemplate a wide range of components, together with crop kind and soil situations, when deciding which of all these fertilizer to use to their fields.
Potash and phosphates are each mined from totally different sorts of pure deposits; nitrogen fertilizers, in contrast, are produced with pure gasoline. QatarLNG, a subsidiary of Qatar Vitality, a state-run oil and gasoline firm, mentioned on Monday that it might halt manufacturing following drone strikes on a few of its services. This successfully took practically a fifth of the world’s pure gasoline provide offline, inflicting gasoline costs in Europe to spike.
That shutdown places provides of urea, a preferred kind of nitrogen fertilizer, notably in danger. On Tuesday, Qatar Vitality mentioned that it might additionally stop production of downstream products, together with urea. Qatar was the second-largest exporter of urea in 2024. (Iran was the third-largest; it’s additionally a key exporter of ammonia, one other kind of nitrogen fertilizer.) Costs on urea bought within the US out of New Orleans, a key commodity port, had been up practically 15 % on Monday in comparison with costs final week, in keeping with information supplied by Linville to WIRED. The blockage of the Strait of Hormuz can be stopping different international locations within the area from exporting nitrogen merchandise.
“After we take a look at ammonia, we’re taking a look at nearly 30 % of worldwide manufacturing being both concerned or in danger on this battle,” says Veronica Nigh, a senior economist on the Fertilizer Institute, a US-based business advocacy group. “It will get worse after we take into consideration urea. Urea is sort of 50 %.”
Different varieties of fertilizer are additionally in danger. Saudi Arabia, Nigh says, provides about 40 % of all US phosphate imports; taking them out of the equation for various days might create “a extremely difficult scenario” for the US. Different international locations within the area, together with Jordan, Egypt, and Israel, additionally play a giant position in these markets.
“We’re already listening to stories that a few of these Persian Gulf producers are shutting down manufacturing, as a result of they’re saying, ‘I’ve a finite quantity of storage for my provide,’” Linville says. “‘As soon as I attain the highest of it, I can not do the rest. So I will shut down my manufacturing so as to be certain I do not go over above that.’”
Battle within the strait has intensified within the early a part of this week, because the Islamic Revolutionary Guard Corps have reportedly threatened any ship passing via the strait. Site visitors has slowed to a crawl. The Trump administration introduced initiatives on Tuesday meant to guard oil tankers touring via the strait, together with offering a naval escort. Even when these initiatives succeed—which the transport business has expressed doubt about—a lot of the preliminary power will most likely go towards shepherding oil and gasoline belongings out of the area.
“Fertilizer is just not going to be essentially the most worthwhile factor that is gonna transit the strait,” says Nigh.
