Key takeaways
•Shipping restrictions in the Strait of Hormuz have already driven sharp increases in fertilizer and energy prices.
•Higher prices could reduce fertilizer use and lower crop yields if the disruption persists, posing significant food security risks.
•Most vulnerable are countries heavily dependent on Persian Gulf fertilizer and natural gas—especially in Africa and South Asia.
While the global food system has largely adjusted to the trade disruptions in agricultural commodities and fertilizers in the wake of the COVID-19 pandemic and the start of the Russia-Ukraine war, the current conflict in the Middle East introduces a new set of challenges at a time when markets and supply chains remain vulnerable to geopolitical shocks. A particularly dangerous problem is the potential for a sustained, major disruption in fertilizer supplies that would threaten global agriculture production and food security.
In 2024, up to 30% of global fertilizer trade passed through the Strait of Hormuz from the Persian Gulf to export markets around the world, as well as an estimated 20% of liquified natural gas (LNG), a key fertilizer feedstock, and 27% of globally traded oil. Now, with Iran limiting shipping through this critical maritime corridor in response to attacks by the United States and Israel, prices have risen sharply across energy and fertilizer markets. Meanwhile, attacks by both sides in the conflict have damaged production sites and export hubs including Ras Laffan Industrial City in Qatar (LNG) and Iran’s Kharg Island (oil). Additional attacks would further reduce supplies.
What are the likely impacts of Iran war on global fertilizer production and trade, given the central role of these inputs in agricultural productivity and food security?
We focus here on two of the three primary fertilizer nutrients, nitrogen and phosphate (potassium is the third), since the Persian Gulf region is a big production hub for both. We concentrate on exports from Gulf countries but note that fertilizers are also produced in other Middle East countries potentially at risk in the conflict. We also assess potential impacts on agricultural production and food prices, outline options for mitigating this shock to the fertilizer value chain, and examine options to build resilience to future shocks.
Implications for fertilizer trade and production
Over the past three years (2023-2025), the Gulf countries were the single biggest regional exporter of urea and ammonia (both nitrogen-based), and the second largest regional exporter of diammonium phosphate (DAP) and monoammonium phosphate (MAP) fertilizers (Figure 1). LNG exports from the Gulf are vital for fertilizer production in other countries with limited domestic supplies of natural gas, including India, Pakistan, Bangladesh, and Türkiye.
Figure 1
The Gulf region is an important supplier of fertilizers and key components across multiple regions (Figure 2).
Figure 2
Nitrogenous fertilizers
Natural gas
Any sustained reduction in LNG production and/or shipments from the Gulf (Qatar supplies around 10% of globally traded natural gas) will have significant implications for nitrogen fertilizer production worldwide. Natural gas is both a key feedstock and the primary energy source for producing ammonia, the building block for all nitrogen fertilizers. It can be transported in its gaseous form in pipelines or by ship as LNG, which has become the dominant form of traded gas globally. Qatar dominates LNG production in the Gulf region and is the world’s third-largest exporter of natural gas after the U.S. and Australia.
A falloff in Gulf LNG shipments will hit hardest in countries heavily reliant on Gulf gas for their fertilizer production, including India, where fertilizer production cuts have already been announced, and Pakistan. But higher global gas prices will also raise fertilizer production costs elsewhere.
Ammonia
The Gulf region also converts a substantial share of its natural gas into ammonia for export, which, like natural gas, is transported in its liquified anhydrous ammonia form via pipelines or maritime shipments through the Strait. Thus, regional ammonia exports are doubly vulnerable—to damage to Gulf LNG production facilities and to shipping disruptions in the Strait.
Ammonia is a critical component of nitrogenous and multinutrient fertilizers; in some markets, such as the U.S., it is applied directly to fields. During 2023-25, 29% of global ammonia exports from 2023-25 originated in the Gulf region, with Saudia Arabia the leading regional exporter. India, South Korea, Morocco, Japan, South Africa, and the U.S. were the top importers in 2025.
Urea
The region’s role in urea production is even more important. Urea remains the most widely used nitrogen fertilizer globally. The Gulf countries accounted for 36% of global urea exports from 2023-25, with Iran and Qatar the largest exporters, followed by Saudi Arabia. In 2025, top importers included India, Brazil, Australia, Thailand, the U.S., Türkiye, Ethiopia. and South Africa.
Iran itself is a major urea producer and exporter. While FAOSTAT reports only minimal official exports, the International Fertilizer Association (IFA) estimates that Iran is in fact the largest urea exporter in the Gulf region.
Phosphate
The Gulf region accounts for 26% of DAP and 13% of MAP global exports. Saudia Arabia is the region’s largest producer and exporter (Figure 3). Top importers from the region include India, Brazil, Australia and the U.S.
Figure 3
Sulfur
Sulfur, a byproduct of oil and gas refining, is both an important secondary plant nutrient and a critical input for producing sulfuric acid, essential in the processing of phosphate fertilizers. Saudi Arabia, Bahrain, the United Arab Emirates, Kuwait, and Qatar are major suppliers of sulfur to global markets. In total, the region provides close to 50% of globally traded sulfur, according to the Fertilizer Institute (TFI).
Given sulfur’s central role in the phosphate fertilizer value chain, any disruption to sulfur exports from the Gulf would compound the challenges facing MAP, DAP, and triple superphosphate (TSP) production globally.
Implications for fertilizer prices
The disruptions of LNG and fertilizer exports from the region have already led to significant price increases (Figure 4). Prices are likely to continue to rise as long as production and shipping from the Gulf are disrupted.
Figure 4
European fertilizer producers, facing a steep rise in natural gas prices, have requested government support for the fertilizer industry and farmers to sustain domestic production. In the U.S., where domestic fertilizer production accounts for 65% of overall domestic supply, the Trump administration has issued a 60-day suspension of the Jones Act (requiring domestic cargo shipments by U.S. vessels and crews) for fertilizer transportation, offered support for cargo and hull insurance, and lifted sanctions on three Belarusian potash producers. The U.S. also suspended sanctions on Russian oil in an attempt to stem conflict-related price increases.
India has a sufficiently large inventory of fertilizers for the Kharif (rainy) season, which starts in June, according to the Fertilizer Association of India. But the organization is calling on the government to take several measures, including factoring price spikes of raw materials into producer subsidy rates for nutrients and prioritizing the fertilizer sector in the allocation of natural gas supplies.
Vulnerability assessment
Sharply reduced supplies of natural gas and fertilizer products will first impact countries that import heavily from the Gulf region and countries that depend on purchasing these commodities on the open market.
As with previous fertilizer price spikes, African countries are particularly vulnerable. While fertilizer production capacity in Africa has expanded in recent years, most of the new capacity is intended for export markets elsewhere, with the majority of African nations “still over-dependent on imported fertilizers, especially non-phosphate-based fertilizers, which expose Africa to external market shocks and price volatility,” according to the 2024 Africa Fertilizer and Soil Health Summit Declaration. Fertilizer use in Africa plunged 25% in 2022 following the Russian invasion of Ukraine, the declaration noted. It set a goal of increasing average use of fertilizers from 18 to 50 kg/hectare by 2034.
Fertilizer subsidy programs are common in Africa and Asia. Low-income countries may find it more difficult to finance subsidies, in the context of existing fiscal constraints and declining overseas development assistance. While subsidies are often a preferred policy option to address high fertilizer prices, it is also important to bear in mind their well-documented downsides, including crowding out private sector participation, weak targeting, and distortions in fertilizer use, given the tendency in policies to mostly stimulate use of nitrogenous fertilizers.
Impacts on agricultural production and commodity prices
Higher fertilizer prices and energy costs also threaten agricultural production. The current fertilizer price surges are occurring alongside comparatively lower agricultural commodity prices. This creates an unfavorable input–output price ratio, which typically lowers fertilizer use—potentially leading to reduced production.
That is one difference between the current situation and the 2022 price spike: then, agricultural commodity prices rose along with fertilizer prices due to a combination of COVID-19-related supply chain disruptions and curtailed exports from Ukraine (in particular wheat) and Russia and Belarus (nitrogen, phosphate, and potash fertilizers). If farmers can obtain higher prices for their crops, that can partially offset higher fertilizer prices and help sustain production.
Any falloff in agricultural production due to the current conflict would likely not happen immediately, as some nutrients remain available in soils for multiple years, and farmers can shift toward less fertilizer-intensive crops such as legumes. Notably, global average yields did not decline following the fertilizer price spikes after the invasion of Ukraine.
A prolonged increase in fertilizer prices, in particular nitrogen-based products, would affect crop yields of nitrogen intensive crops in many countries, potentially leading to sharp food price increases of those commodities. An analysis on the impact of the crisis on nitrogen-intensive rice cultivation by the International Rice Research Institute warns that if shipping disruptions through the Strait of Hormuz continue, “the energy and fertilizer channels may become much more consequential short- and medium-term risks than the initial logistic shocks, especially for Asia’s next crop cycle.”
Potential mitigating factors and other considerations
The experience following the invasion of Ukraine demonstrated that new trade routes can emerge relatively quickly in the wake of a crisis: Ukrainian agricultural exports and Russian and Belarusian fertilizers both found alternative pathways after major disruptions, as did natural gas and oil from Russia. Rerouting supplies from the Gulf region—through the Red Sea and Suez Canal or via Gulf of Oman ports—may also become feasible over time, but each route faces its own set of challenges and high costs, particularly in the short term.
The earlier crisis also affected natural gas and ammonia pipelines running from Russia through Ukraine. European fertilizer producers were hit hardest, leading to cuts in production and a shift toward procuring LNG from global markets—including the Middle East and the U.S.—while Russian supply found its way to other markets. Should Gulf region LNG exports be limited or blocked over a longer period, the U.S. might expand its own exports, given significant LNG export capacity, as could Australia, along with some other countries already exporting or ramping up capacity.
For India, Pakistan, and other countries that use LNG as a feedstock for nitrogen fertilizer production, lost LNG imports will compound the fertilizer shortage. Some countries are already shifting to domestic coal for energy production, and similar moves may be in the offing for fertilizer production. In China, fertilizer production has always relied heavily on coal as a feedstock and energy source for ammonia production (an estimated 70%-80% of production is coal-based), and now likely has less incentive to increase LNG use.
Thus, the world may see an increase in the use of coal to maintain steady energy supplies and produce fertilizer—a trend that would exacerbate climate change, given coal’s much bigger carbon footprint.
Increasing fertilizer production
Some fertilizer producers have the capacity to increase production in the short run, and some can expand capacity relatively swiftly. The IFA November 2025 short term fertilizer outlook suggests that 2026 nitrogen capacity is likely to increase by 4% over 2024, and phosphate and potash by 5% each. This could help reduce the upward pressure on fertilizer prices, though it is clearly not sufficient to compensate for the present supply reductions caused by the war.
However, new production sites require long lead times and substantial investment and are likely to remain concentrated in regions with access to low-cost natural gas or significant mineral deposits. As a result, the bulk of global fertilizer production and exports will continue to be dominated by a small number of countries, leaving the sector structurally vulnerable to shocks.
An expansion of “green” ammonia—produced through electrolysis powered with renewable energy rather than natural gas or coal—would represent a major breakthrough, both for its smaller carbon footprint and its potential to enable nitrogen production in more countries. But to date, green ammonia contributes only a small fraction of overall production. The IFA points to “mixed decarbonization signals,” such as delays to the International Maritime Organization’s Net-Zero Framework (aimed at reducing carbon emissions from shipping), and in the European Union’s Carbon Border Adjustment Mechanism (a tariff on carbon-intensive goods), as likely decreasing the viability of green ammonia projects, but still sees an important future for the product.
On the demand and consumption side, greater efforts to promote balanced and efficient fertilizer use could reduce overapplication, limit nutrient losses, and narrow the gap between countries that overuse and those that underuse fertilizers. Other options include increased use of organic fertilizers, slow and controlled-release products, and microbial fertilizers, though cost and logistical constraints currently limit their widespread adoption.
Ultimately, stabilizing fertilizer markets will depend on reducing hostilities and ending the Iran war. In the meantime, efforts should focus on safeguarding and prioritizing fertilizer shipments as a strategic and humanitarian good, given their critical role in agricultural production and food security. Export restrictions—often imposed by countries seeking to protect their own agricultural sectors—should be avoided, as such measures tend to push global fertilizer prices even higher. Exempting fertilizers from export restrictions would help mitigate these risks.
Another factor is biofuels, which become significantly more lucrative in periods of high energy prices. Diverting more agricultural crops to biofuel production will put upward pressure on food prices. This could be mitigated by a careful review of biofuel incentives.
Conclusions
The ongoing Iran conflict represents the third major shock to fertilizer markets in six years since COVID-19 restrictions triggered price spikes starting in the spring of 2020. While fertilizer markets have shown remarkable adaptability and resilience, the sector’s underlying vulnerabilities remain largely unchanged. Concentrated production in a few regions, heavy reliance on fossil fuels and international trade, and persistent inefficiencies in fertilizer use continue to expose global agriculture to significant risks.
Charlotte Hebebrand is Director of IFPRI’s Communications and Public Affairs Unit; Joseph Glauber is a Research Fellow Emeritus with IFPRI’s Director General’s Office; Rob Vos is a Senior Research Fellow with IFPRI’s Markets, Trade, and Institutions (MTI) Unit; Brendan Rice is an MTI Research Specialist. Opinions are the authors’.
