Urea offers in the Middle East have dried up on the back of the escalation of conflict in the region, while producers take stock and gauge clarity on the freight situation.
Granular urea was priced at $490-495/t fob Middle East on 27 February. But levels are set to surge in light of the hostilities, with Egyptian granular urea trading higher on 28 February. At least two major Middle Eastern producers have taken a step back from the market to assess the fallout from the escalating conflict in Iran. Suppliers are also grappling with complications related to the strait of Hormuz, a crucial shipping channel in the region. Some vessels are still crossing the strait, but the number is limited, according to a shipping source.
Vessel owners' inability or unwillingness to cross Hormuz threatens deliveries from other suppliers in the region beyond Iran, with producers in Qatar, Saudi Arabia, Bahrain and the UAE braced for impact. Producers in those countries accounted for a collective 12.6mn t of urea exports in 2024, according to Argus data.
On paper, Omani suppliers Omifco and SIUCI may be spared the brunt of the impacts given that they lie beyond the strait.
But SIUCI, which loads its 1.22mn t/yr granular urea capacity at Sohar, is in the country's Al Batinah North Governorate and is closer to the strait. The supplier may face additional issues with vessel availability and the extra risk facing vessel owners. Omifco, which supplies its 2.1mn t/yr granular urea capacity through trading arm OQ and loads at Sur, appears less likely to be affected given its location further along the peninsular in the Ash-Sharqiyah region.
The Middle East is the largest urea export region and ships around 20mn t/yr, 35pc of global seaborne trade, of which Iran accounts for about a quarter.
