Intelligence Brief: Global Fertilizer Supply Chains Threatened by Strait of Hormuz Closure

Apr 10
4 min read

Updated: Apr 14

Date: 10/04/2026

Where?

The Strait of Hormuz, but bears consequences for global supply chains.

Who’s involved?

Iranian authorities, global food and fertilizer supply chain.

What happened?

On 28/02/2026, Iran blocked the Strait of Hormuz as a response to strikes by the US and Israel on strategic targets in Iran, including military sites, Iran’s missile infrastructure, and the Iranian leadership.
The closure of the Strait of Hormuz has raised concerns about the global energy supply and has caused oil prices to soar. Beyond its role in energy markets, however, the strait is also crucial for transporting critical resources used in fertilizer production, making it an important supply route for industries that depend on synthetic fertilizers.

Analysis

The Gulf region is a key producer of fertilizer and the closure of the Strait of Hormuz has therefore raised concerns about fertilizer shortages. The region especially produces nitrogen fertilizers, of which Urea is the most widely used. Nitrogen fertilizers are used for many types of crops, but especially grains, cereals, and leafy crops.
Besides the final product, the Gulf region also exports various raw materials used for the production of fertilizer. The region is the source of 44% of the global sulfur trade which is a critical ingredient of phosphate fertilizers, and an important exporter of natural gas, both a raw material and the primary energy source for the production of most nitrogen fertilizers. Particularly China, Morocco, and Indonesia rely on the Gulf region for their import of sulfur. Furthermore, fertilizer factories in India, Bangladesh, and Pakistan have closed down production due to natural gas shortages.
India illustrates the scale of what is at stake. As the world's second-largest consumer of nitrogen fertilizers, India produces around 87% of its urea domestically but depends on Gulf imports for the natural gas and raw materials that make that production possible, with 30-40% of nitrogen imports and 70% of finished fertilizer imports sourced from the Gulf.
The Indian government has already rationed natural gas to fertilizer plants. Prices are rising and farmers, many of whom were already trapped in poverty cycles and debt before this crisis, have begun hoarding supplies.
The worse may be yet to come. A critical pressure point arrives in May, when procurement begins ahead of India's June planting season. These shortfalls will translate directly into reduced yields at the October-November harvest. The global impact would be significant. As the world's second-largest rice and cotton producer, leading milk producer, and largest beef and veal exporter, a significant drop in Indian food output will ripple through global supply chains.
The disruption of the fertilizer supply and production chain will most likely result in a shortage and drive up global prices, which will negatively impact food production. The high price of fertilizer will directly increase the price of food. For instance, the price of fertilizer accounts for about 20% of the total cost of grain. Additionally, farmers might choose to delay planting, switch to crops that are less reliant on fertilizers (like legumes), or choose to reduce the amount of fertilizer used, leading to reductions in the eventual yields. As a result, food shortages might occur, specifically for foods produced with fertilizer-reliant crops.
Fertilizer shortages are especially impactful as the spring planting season is about to begin, which is the time when most farmers prepare the soil for planting crops. Most farmers order fertilizer in March for April and May. Therefore, decisions farmers make at this moment will directly affect the available food supplies in a few months time, when the crops are supposed to hit the supermarket shelves.
Rising fertilizer and food prices will hit the poorest countries hardest, as they cannot pay for the increased costs, and negatively impact countries that are heavily reliant on imports for these products. Research on the effects of the increased fertilizer prices in 2021 and 2022, when gas prices increased as a result of the Ukraine war, shows that African farmers were most affected. Projections of the current disruption give similar results, with countries in South Asia and Africa specifically facing the potential of largest losses.
Besides stimulating crop growth, nitrogen fertilizers are also often used to make IEDs (improvised explosive devices). Therefore, increased prices for this type of fertilizer might also affect organised crime and terrorist groups that make use of these materials for their explosives. The full extent of these consequences are hard to determine, however possible consequences could include increased smuggling of fertilizers or increased use of other materials that make IEDS, like gunpowder or hydrogen peroxide.
Food insecurity is a known destabilizing factor and driver of conflict. Hence, if food shortages occur, the affected regions are also likely to become more unstable and see an increase in civil unrest and violence.

Conclusion and assessment

The blockage of the Strait of Hormuz has severely disrupted global supply chains for both natural gas and finished fertilizer products. As the Gulf region serves as a primary hub for nitrogen-based fertilizers and essential raw materials like sulfur, this closure has created an abrupt supply deficit in international markets. The resulting scarcity and surge in prices are projected to have serious implications for global food production, resulting in higher operational costs for farmers and an increased likelihood of widespread food shortages. The effects of this are especially severe for developing nations and those with a high dependency on agricultural imports, specifically across Southern Asia and Africa, where the capacity to absorb such price shocks is limited. Given that food insecurity historically acts as a significant destabilizing force that can trigger or fuel regional conflicts, the current disruption poses a critical geopolitical threat. This must be considered when evaluating the future stability of impacted regions.