Global fertilizer market under pressure: the impact of the Hormuz crisis
Disrupted supplies, price spikes, and food security risks
Overview
The escalation of the conflict in the Middle East has had a significant impact not only on crude oil and petroleum product supplies, but has also materially constrained fertilizer exports from countries in the region.
World’s third-largest producer of nitrogen fertilizers (2024)
World’s 27th-largest producer of nitrogen fertilizers (2024)
World’s fourth-largest producer
of nitrogen fertilizers (2024)
of nitrogen fertilizers (2024)
World’s sixth-largest producer of nitrogen fertilizers (2024)
Top 3 global exporter of DAP
Top 4 global exporter of MAP
Top 3 global exporter of DAP
Top 4 global exporter of MAP
Oman
Bahrain
Qatar
Saudi Arabia
The Persian Gulf: a critical fertilizer hub
As is well known, the Persian Gulf is home not only to producers of crude oil and petroleum products, but also to major exporters of nitrogen and phosphate fertilizers. In 2024, Oman ranked as the world’s third-largest producer of nitrogen fertilizers, while Qatar ranked fourth, Saudi Arabia sixth, the United Arab Emirates thirteenth, and Bahrain twenty-seventh. In addition, Saudi Arabia ranked among the world’s top three exporters of DAP (diammonium phosphate, a phosphorus-nitrogen fertilizer) and among the top four exporters of MAP (monoammonium phosphate, also a phosphorus-nitrogen fertilizer).
United Arab Emirates
World’s 13th-largest producer of nitrogen fertilizers (2024)
The Strait of Hormuz chokepoint
The effective closure of the Strait of Hormuz in early March due to the armed conflict in the Middle East had a major impact on the global fertilizer market. Roughly one-third of global fertilizer volumes, or approximately 16 million tonnes per year, are exported through this waterway.
16
million
tonnes
Nitrogen fertilizers: the most severe impact
The most severe consequences have been felt in the nitrogen fertilizer market, where demand is currently high due to the crop maturation season. If a farmer misses one season without nitrogen fertilizers, such as urea, crop yields are likely to suffer immediately, whereas lower usage of other fertilizers tends to have longer-term consequences, affecting not the current harvest but rather soil quality over time, Reuters reports.
According to the OECD classification, nitrogen fertilizers include urea, ammonium nitrate, UAN (urea ammonium nitrate solution), and other products derived from the synthesis of ammonia from atmospheric nitrogen and hydrogen.
Nitrogen fertilizers
Other fertilizers (P, K)
Missing just one season causes IMMEDIATE yield loss
Lower usage affects LONG-TERM soil quality, not current harvest
Urea price spike during the conflict
Before escalation
February 2025
March 2026
During conflict
+40%
< $500 / tonne
> $700 / tonne
According to Reuters, supply restrictions in the urea market and India's heavy dependence on imports from Gulf countries drove Middle Eastern urea prices up by around 40% in March during the conflict, to above $700 per tonne, compared with below $500 per tonne before the escalation.
Oman (OMIFCO)
UAE (Fertiglobe)
Bahrain
Production capacity:
- Ammonia: 1.2M t/year
- Urea: 1.6M t/year
OEC rankings (2024):
- 8th largest exporter of fertilizers overall
Main buyers: India, Australia, USA, Brazil, Thailand
Total capacity (UAE, Egypt, Algeria):
6.6M tonnes/year (ammonia + urea)
6.6M tonnes/year (ammonia + urea)
Key UAE asset: Fertil plant (Ruwais)
- Urea: 2.1M t/year
- Ammonia: 1.2M t/year
Exports (Fertiglobe, 2024):
- Urea: 4.4M tonnes
- Ammonia: 1.2M tonnes
Compared to other Gulf countries, Bahrain has more limited production capacity for nitrogen fertilizers
Part of the regional fertilizer landscape, but not a major exporter.
Urea exports (WITS, 2024):
- 2.5M tonnes ($1.1 billion)
Qatar (QAFCO)
Saudi Arabia (SABIC Agri-Nutrients)
QAFCO production capacity:
- Ammonia: 3.8M t/year
- Urea: 5.6M t/year
World's largest single-site urea exporter (14% of global supply)
Actual production (2024):
- Ammonia: 3.7M t
- Urea: 5.8M t
QatarEnergy suspended production in March at the world's largest urea plant
4th largest producer of nitrogen fertilizers (2024)
Production capacity: 9M tonnes/year of fertilizers
Output (2024): ~8.5M tonnes
Sales: ~7.2M tonnes
Sales: ~7.2M tonnes
Product mix:
- Ammonia: 39%
- •Urea: 57%
- Other: 4%
New project (Al Jubail):
- Low-carbon ammonia: 1.2M t/year
- Urea & agrochemicals: 1.1M t/year
Nitrogen fertilizer exports: $1.7B
Total fertilizer exports: $5B
Total fertilizer exports: $5B
Exports (WITS, 2024):
- Urea: 4.4M tonnes
- Ammonia: 2.2M tonnes
Phosphates and potash: secondary impact
The situation in the Middle East has also affected the phosphate fertilizer market, which includes fertilizers produced from phosphate rock, sulphuric acid, and ammonia, as well as the potash market, based on potassium chloride (MOP). However, so far the consequences for these markets have been less critical than for nitrogen fertilizers.
Potash: limited impact
Phosphate highlights
Among Gulf countries, only Saudi Arabia has major phosphate fertilizer production capacity.
DAP exports (2024):
3.9 million tonnes
Value: $2.3 billion
MAP exports (2024):
1.4 million tonnes
Top 4 global exporter of mixed fertilizers (8.9% share)
Ma'aden (state-owned): Phosphate capacity: 6.0M → 7.5M t/year (2026) Goal: enter top 3 global exporters
DAP exports (2024):
3.9 million tonnes
Value: $2.3 billion
MAP exports (2024):
1.4 million tonnes
Top 4 global exporter of mixed fertilizers (8.9% share)
Ma'aden (state-owned): Phosphate capacity: 6.0M → 7.5M t/year (2026) Goal: enter top 3 global exporters
Gulf countries do not have major potash fertilizer production capacity. Therefore, the impact of reduced exports from the region on the potash market is expected to be more limited.
Potash (MOP) is primarily produced by Canada, Russia, and Belarus. The Gulf region plays a minor role in global potash supply.
Limited impact from Gulf export disruptions.
Potash (MOP) is primarily produced by Canada, Russia, and Belarus. The Gulf region plays a minor role in global potash supply.
Limited impact from Gulf export disruptions.
According to IFA estimates, global fertilizer production in 2024 included the following volumes:
- Ammonia: 189.8 million tonnes
- Urea: 199.7 million tonnes
- Phosphoric acid: 88.4 million tonnes
- MAP + DAP combined: 66.8 million tonnes
- Potash fertilizers: 73.5 million tonnes
If the conflict is prolonged...
If the conflict in the Middle East is prolonged, the global market may face not only an energy-sector crisis, but also food inflation (a sharp increase in food prices) and lower crop yields — since half of the world's food is produced with the help of fertilizers.
50% of global food is produced with fertilizers.
G7 countries do not maintain strategic fertilizer reserves (unlike oil stockpiles) which increases market vulnerability.
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