Economists are worried about fossil fuel supplies as the military conflict in Iran continues to engulf the Middle East. But some are raising alarms about what they see as underappreciated risks to the world’s food supply stemming from the region’s dominance over global fertilizer flows. The conflict has already pushed fertilizer benchmarks higher, with nitrogen prices spiking as oil and gas flows from the Gulf were curtailed, and LNG operations in Qatar were temporarily halted. Falling shipments of natural gas have raised feedstock costs for nitrogen producers elsewhere, just as export volumes of urea, DAP, and ammonia from the Persian Gulf dropped sharply. Below is more information about the Middle East’s fertilizer clout and the risk it poses for farmers and the global food chain
From Oil and Gas Giant to Fertilizer Heavyweight – Fertilizer is energy in another form, and the Middle East has turned its cheap natural gas into a strategic advantage in nitrogen production. Nitrogen fertilizers such as ammonia and urea are highly energy‑intensive, so global production has naturally clustered near low‑cost gas hubs like the Persian Gulf. Over the past decade, Gulf exporters have built out world‑scale plants and export terminals, positioning the region as one of the lowest‑cost suppliers into key importing markets. Five countries in particular—Iran, Qatar, Saudi Arabia, the United Arab Emirates, and Bahrain—now sit at the heart of seaborne nitrogen trade. In 2024, these five accounted for about 23% of global ammonia trade and 34% of global urea trade.
A Chokepoint for Global Nitrogen – That concentration of production would be manageable if supply routes were diversified, but they are not: much of this volume must pass through the Strait of Hormuz. Industry estimates suggest roughly a quarter to a third of the world’s nitrogen fertilizer exports, and about a third of global urea trade, move through this single corridor. Monthly exports from the Arab Gulf alone exceed 1.5 million metric tons (MT) of urea, with Iran adding another 350,000–400,000 MT per month on top. When shipping through Hormuz slows to a trickle, the shock ripples quickly into global markets. The International Food Policy Research Institute (IFPRI) has warned that as much as one‑third of global fertilizer trade could be affected if disruptions persist, with higher costs squeezing farm margins and forcing growers to rethink application rates and crop choices.
Phosphates and Sulfur – Middle Eastern dominance extends beyond nitrogen into key parts of the phosphate value chain. Saudi Arabia has emerged as a major exporter of ammoniated phosphates such as DAP and MAP, providing around 18% of global trade in these products. When you include other regional exporters and conflict‑exposed producers around the Eastern Mediterranean and North Africa, more than one‑fifth of global MAP, DAP, and TSP exports are now tied to countries affected by current disruptions. The region also controls an outsized share of sulfur exports, a critical raw material for phosphate fertilizers. Gulf states, including Saudi Arabia, the UAE, Kuwait, and Qatar, accounted for approximately 41% of global sulfur exports in 2025, with Iran contributing another 4%, meaning nearly half of global sulfur trade depends on this broader neighborhood. That gives Middle Eastern players leverage not just as finished fertilizer exporters, but also as gatekeepers of essential inputs.
How Disruptions Translate Into Higher US Fertilizer Prices – It doesn’t take much trouble in the Gulf to rattle nitrogen benchmarks. If vessels can’t move freely through the Strait of Hormuz or the Red Sea, several things tend to happen in sequence:
• Fewer tons reach big importing regions like Brazil and India, pushing their import prices higher.
• Buyers who would normally rely on Gulf products start looking aggressively at alternative origins—North America, North Africa, and parts of Asia.
• U.S. producers suddenly see stronger export opportunities and re‑price accordingly, pulling domestic offers up toward global parity.
Governments around the world are already making moves to protect domestic supplies and shield farmers from rapidly rising costs. Among them is China, which has told exporters to halt shipments of nitrogen-potassium fertilizer blends. The government also reaffirmed its existing export restrictions on urea, according to Bloomberg.
In a letter to President Trump, American Farm Bureau Federation President Zippy Duvall wrote, “These supply chain shocks are expected to drive already record-high input prices even higher at a time when farm margins are already extremely tight, and many farmers are underwater.” Duvall went on to warn that a “failure to act could lead to disruptions to the food supply chain not seen since 2022 when food price inflation reached 40-year highs.” Personally, I don’t see that playing out. But there are certainly some concerns about rising input costs associated with Middle East uncertainties. (Sources: American Farm Bureau, DTN, Politico, FarmDocDaily)
