How does the Iran war affect fertiliser supplies, prices and food security?
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- March 18, 2026
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As the US-Israel war with Iran enters its third week, analysts warn it is severely disrupting fertiliser markets and endangering food security for developing countries in the near term.Here is how the conflict is affecting fertiliser costs, trade flows and output: Fertiliser production is energy-intensive, relying heavily on natural gas as a feedstock, with energy making up as much as 70% of production costs.As a result, much of the world’s fertiliser is made in the Middle East, with one-third of global trade in it passing through the Strait of Hormuz, a narrow shipping route along Iran’s coast that has largely been shut since the conflict began.Some 20% of the world’s oil and liquefied natural gas also transits the Strait, and its near closure, combined with missile and drone strikes across the Gulf, have forced regional energy facilities to halt output. That has, in turn, shut fertiliser plants in the Gulf and beyond, just as farmers across the Northern Hemisphere prepare for spring planting, leaving little margin for delays.About half the world’s food is grown using fertiliser, so prolonged supply disruptions would have major implications for food availability, according to Argus analyst Marina Simonova. In some countries, fertilisers account for up to 50% of the cost of grain production, and the UN’s food agency has warned that many low income countries were already suffering from food insecurity prior to the war.The most important fertilisers near term are nitrogen-based products like urea because, by and large, if a farmer doesn’t apply them for one season, yields will likely be hit. This is less so the case with other key products, like those based on phosphate and potassium. The global market for urea was already struggling with tight supplies prior to the current conflict, with Europe forced to cut output due to the loss of cheap Russian gas and China restricting fertiliser exports including urea in order to ensure domestic supplies.QatarEnergy has halted output at the world’s largest urea plant after shutting down gas output following attacks on its LNG facilities. In India, a massive global urea market, three urea plants have cut output as LNG supplies from Qatar have plummeted. India, home to nearly a fifth of the world’s population, buys more than 40% of its urea and phosphatic fertilisers from the Middle East, and recently agreed to buy 1.3mn tonnes of urea, some of which might not arrive on time.Bangladesh has shut four of its five fertiliser factories, while Australia’s Wesfarmers has warned of possible shipment delays, including for urea. Brazil is almost 100% reliant on urea imports, nearly half of which transits the Strait of Hormuz. In the US, farmers are reporting empty shop shelves, with the country about 25% short of fertiliser supplies for this time of year.Globally, urea exports are set to fall to about 1.5mn metric tonnes in March, compared to 3.5mn without China’s supplies, or 4.5 to 5mn with China, according to Scotiabank.Urea export prices in the Middle East have jumped about 40% to just above $700 per metric tonne last Friday from just under $500 before the war, according to Argus. In the US, fertiliser prices have surged as much as 32% since the conflict began. Analysts say prices for nitrogen-based fertilisers like urea could roughly double if the war drags on.Given the Middle East’s dominant market share, no producer can quickly make up for the lost supply, according to Chris Lawson, analyst at CRU. Russia, the world’s largest fertiliser exporter, is facing supply disruptions due to Ukraine drone strikes, while China, despite ample capacity, is restricting exports, he said. —Reuters
