The cost of shipping urea from Venezuela jumped sharply after the US raid on 3 January, which led to the capture of the country's president Nicolas Maduro, but loadings and shipments are set to continue.
Some vessel owners were understood to be seeking a war-risk premium on 3-4 January in the aftermath of the raid, which involved helicopter and missile attacks in Caracas and other regions. But the situation is understood to be stabilising, with vessels arriving to load urea in the coming days. Freight rates for loading urea from Venezuela have been substantially elevated in recent weeks, even without an added premium.
A war-risk premium ramps pressure up on suppliers, eroding margins, and adds significant costs to cargoes that may have already been purchased by trading firms on a fob basis. Venezuelan producers had cut fob prices of urea in recent weeks, as the US increased its military presence in the region, in a bid to continue to push product out — reducing prices from levels already much below standard origins because of existing complications relating to US sanctions.
Granular urea prices dropped to $300/t fob Jose and below in the second half of December, which marks a nearly $100/t discount to other origins that serve Latin American markets. Argus assessed granular urea at $390-405/t fob Nigeria on 2 January.
But exporters are facing further pressure because of the increased freight rates. The most recent vessel to load with urea from Jose, Venezuela's main export hub, was the Centurion Juktas in mid-December, according to vessel-tracking data from Kpler. But the Hongli 8 is scheduled to arrive in Jose on 5 January, Kpler data show.
Venezuelan urea typically heads to Brazil, as well as some other nearby markets and Mexico. Venezuela is home to three major urea facilities, with a combined operating capacity of up to 2.2mn t/yr of granular and prilled urea. But exports have varied widely in recent years, with Argus' consulting arm estimating Venezuelan urea exports at just over 400,000t in 2025, down from over 700,000t in 2020-21.
