The war in Iran is raising new concerns about the world’s supply of fertilizer, and the fertilizer market is already reflecting those concerns in rising prices, further tightening pressure on producers.
While the world press focuses on oil and gas moving through the strategic Strait of Hormuz, an even higher percentage of the world’s fertilizer supply—roughly a third—also runs through the strait. According to Forbes’ Robert Rapier, the Middle East accounts for approximately 40% to 50% of traded volume of nitrogen fertilizer. The United States is also a major fertilizer producer, and exports phosphates to markets including Brazil and India, but most U.S. fertilizer production is used domestically.
Iran ranks as the fourth-largest urea exporter based on mid-2025 data. Because of long-standing sanctions on Iran, the U.S. doesn’t import any fertilizer from Iran directly. Iran exports to nearby markets and China. Iran’s Kharg Island terminal at the head of the Persian Gulf has already been targeted by U.S. forces. In addition to handling 90% of Iran’s oil exports, the Kharg Island terminal exports natural gas and sulfur fertilizer.
Other significant exporters of urea include Egypt, Oman, Saudi Arabia, and Qatar, all of which are exposed to potential Iranian retaliation and disruption as Iran seeks to widen the war with drone attacks.
A radio message broadcast to ships in and around the Strait of Hormuz, purportedly from the Iranian Revolutionary Guard Corps, declared the Strait of Hormuz “closed.” Several media sources repeated the IRGC claim that the strait was “closed,” but the reality appears otherwise. Iran itself continues to load its ships for transit at the head of the Persian Gulf. According to international law, Iran has no legitimate authority to close the strategic strait, and it remained open even during the 1980s war between Iran and Iraq, including the so-called “tanker war” when about 450 vessels were hit by attacks.
Most ships are avoiding the strait, nevertheless, especially as marine insurers are increasing war risk premiums. According to the “What’s Going On With Shipping?” YouTube channel of maritime professor and commentator Sal Mercogliano, an expert on shipping news, a few tankers are turning off their AIS devices and speeding up to run the Strait. Bloomberg reported that oil and gas shipping is “largely paused” through the strait.
Seatrade Maritime News reported that the flights of vessels away from the region accelerated after an Egyptian container ship, the 1,749-container Safeen Prestige, owned by Transmar International Shipping of Abu Dhabi, was struck and abandoned by her crew, who were reported safe. Between 138 and 147 container ships were reported to be trapped in the Persian Gulf.
Progressive Farmer’s Russ Quinn reports that urea prices for barges in New Orleans traded $520/ton to $550/ton on Monday, up from an average of $475/ton last week, according to CRU Group.
David Murray can be reached at [email protected].
