The repercussions of the Middle East war for the fertilizer sector are mounting — aside from immediate urea, ammonia, phosphate, sulphur and sulphuric acid price spikes.
Vessels' inability to transit the strait of Hormuz has driven price rises for essential commodities and the threat of severe shortages across the supply chain. The urea price had jumped by over $230/t, around 50pc, from $482.50/t fob Egypt on 27 February to $720/t on 17 March, while the ammonia price has climbed by $115/t, or 24pc, from $495/t fob Middle East on 27 February to $600/t on 18 March. Strikes on infrastructure across the Mideast Gulf and force majeures could further squeeze availability.
Protecting domestic supply
The ripples of the war extend far beyond the Gulf region. Oil and gas are both vital for the global fertilizer supply chain, and the disruption to their supply has prompted government directives to protect fertilizer and energy supplies.
India has issued a directive to prioritise domestic natural gas and regasified LNG supply to the city gas network, designating fertilizers as a second-priority status and limiting gas supply to 70pc of the sector's typical needs, although recent reports suggest it may be nearer 75pc. India relies heavily on imports of raw materials to feed its extensive fertilizer industry and on imports of finished fertilizers, mainly urea and DAP. Over half of India's natural gas imports come from the Middle East, along with around 80pc of its ammonia requirements. India produces 2.6mn t/month of urea, with gas the key feedstock, but this latest directive has resulted in an estimated production drop of some 800,000 t/month.
China has vast nitrogen and phosphate fertilizer production capacity, and has become a major exporter during its off season. In a normal year, India would look to China to supply much of its nitrogen and phosphate fertilizer shortfall, but China is concerned at the sulphur and energy supply squeeze and is taking measures of its own. Chinese urea or other nitrogen fertilizer exports are unlikely to be available in the near future.
China imports around 45pc of its crude from the Middle East, along with 25-30pc of its LNG. Around half the 9.6mn t of sulphur — essential for phosphate fertilizers — that China imported in 2025 was from the Middle East.
The price of sulphur rose by some 600pc in the two years to January 2026, leading to the erosion of demand, with prices only starting to correct back down on the eve of the conflict. Because of rapidly rising sulphur prices, China had already halved its sulphuric acid export schedule on the year in January-April in an attempt to preserve sulphur for its own needs.
There may be no exports of Chinese TSP and SSP, or DAP and MAP, before August, unless the sulphur price falls.
The US' sanctions enforcement arm is allowing imports of crude, refined products and fertilizers from Venezuela. President Donald Trump has also announced a Jones Act waiver to facilitate deliveries of key commodities, including fertilizers, between US ports.
Separately, a letter signed by 64 agricultural groups on 13 March urged fertilizer producers Mosaic and JR Simplot to help stabilise prices by withdrawing support for countervailing duties on the US' Moroccan phosphate fertilizer imports.
Bracing for shortages and price hikes
The lack of Chinese nitrogen and phosphate fertilizer exports, in addition to Middle East supply constraints, will have a substantial impact — not only in India, where the situation could turn critical, but in the agricultural powerhouses of Brazil, US and Australia.
Australia imported over 60pc of its urea from the Middle East in 2025. Current domestic supplies will last until mid-April, but beyond that it will have to turn to alternative sources, including southeast Asia.
Brazil is just starting its purchasing campaign for the 2026-27 soybean season and would normally be looking to cover 25-30pc of its extensive phosphate fertilizer requirements from China. But without Chinese product and the war constraining Saudi phosphate fertilizer shipments and sulphur and ammonia shipments to other major phosphate fertilizer producers such as Morocco, prices will rise.
Brazil depends almost entirely on imports to cover its urea requirements, with around half of these typically from the Middle East.
In Europe, the market is watching to see whether the European Commission classes the war in the Middle East as a "serious and unforeseen circumstance", triggering the suspension of the carbon border adjustment mechanism for fertilizers — a process that could take months. Although most requirements are now covered for the main season that is now under way, fertilizer prices in Europe are rising as a direct result of fears over shortages and affordability.
