Now the route is essentially closed, as multiple vessels have been struck by ordnance while in or around the strait. Fertilizer costs have already spiked, but the worst may come when spring planting begins.
Fertilizer is not oil or gas - without it, crop yields suffer, leading to higher food prices.
On February 28, 2026, the United States and Israel carried out military attacks against Iran. Since then, shipping movements through the Strait of Hormuz - a tight channel off Iran's southern coast - have faced major interruptions. Major fertilizer-producing countries in the region, including Saudi Arabia, Qatar, Bahrain, Iran, Kuwait, and the United Arab Emirates, have stopped or reduced shipments.
Chris Lawson, a CRU vice president focusing on market intelligence and pricing, said, "With the Strait of Hormuz essentially cut off, there's a big chunk of global trade that isn't able to move right now."
Sarah Marlow, who leads fertilizer pricing globally at the price reporting agency Argus, explained: "Almost 50% of all globally traded sulfur comes from that region. For urea, it's around a third of all globally traded urea that comes from that region and for ammonia, it's close to 25%."
Get your free investing masterclass bonus when you join Market Briefs, our free daily newsletter
According to Oxford Economics' Alpine Macro, urea prices surged around 50% and ammonia prices around 20% since the war began. Additionally, prices for other fertilizers, including potash and sulfur, have increased as well since the conflict started.
This disruption echoes the 2022 Russia-Ukraine war, which also sent fertilizer costs soaring. However, analysts note that the current closure is even more disruptive because of the high concentration of production in Gulf states. "I'm a lot more concerned about the current crisis than I was when Russia-Ukraine happened four years ago," said Dawid Heyl, co-manager of the natural resources team at Ninety One.
One energy company, QatarEnergy, said it would halt further downstream urea output after pausing its LNG production. China also put restrictions on fertilizer exports to protect its domestic market, Reuters reported last week.
Not all fertilizers are equal. Unlike potash or phosphates, which farmers can skip for a season, nitrogen is essential every year.
"You can skip a season of potash, you can skip a season of phosphates, but you can't skip a season of nitrogen," Heyl said. He added: "There's a direct correlation to your nitrogen application and your agricultural yield in the end."
Iran itself ranks as a significant manufacturer of nitrogen fertilizers and is among the world's top exporters.
Heyl noted that markets entered 2026 with fairly high stocks of basic food commodities reliant on fertilizer, providing "buffer stocks" that might help offset some shortages. "If agricultural yields were [hypothetically] impacted by 5% this year, I don't think we'll be looking at starvation, but it would certainly cause food inflation," he said. He noted that developing nations would probably bear the brunt of the effects.
The ripple effects of the Hormuz closure extend beyond immediate price spikes. Developing countries that depend on imported fertilizers face the greatest risk, as they lack the financial buffers to absorb higher costs. Without swift resolution, the disruption could lead to reduced fertilizer application and lower crop yields in key agricultural regions, ultimately exacerbating global food insecurity.
With the conflict ongoing and no clear timeline for reopening, fertilizer prices may continue rising until shipping resumes or alternative supply routes emerge.
Subscribe to Market Briefs, our free daily newsletter, and claim your bonus investing masterclass
