How the Iran War is affecting the urea trade and food security

2026-03-17 21:07:00, Kosova & Bota CNA

The Iran war is causing major disruptions to the global market and raising fears of worsening food security, especially in poorer countries.

At the heart of the crisis is the Strait of Hormuz, through which about a third of the world's fertilizer trade passes. Since the conflict began, passage has been restricted, while missile and drone attacks in the Persian Gulf have disrupted production at power plants.

Fertilizer production is directly linked to energy, with up to 70% of its costs based on natural gas. The disruption of energy flows has forced fertilizer factories in the Middle East to suspend or reduce their operations, at a critical time for farmers in the Northern Hemisphere preparing for spring planting.

The impact is direct on the food chain. About half of the world's food production depends on the use of chemical fertilizers, while in some countries their cost corresponds to up to 50% of grain production.

Nitrogen fertilizers, such as urea, are considered critical, as not using them for even one growing season can lead to a significant reduction in yields. The urea market was already under pressure before the Iran conflict, due to reduced production in Europe following the loss of cheap Russian gas and restrictions imposed by China on exports to ensure domestic sufficiency.

The current crisis has worsened the situation. In Qatar, Qatar Energy has suspended operations at the world’s largest urea plant after natural gas production was halted by attacks on LNG facilities. In India, three major plants have reduced production after imports of liquefied natural gas (LNG) from Qatar were restricted. India, home to nearly a fifth of the world’s population, relies on more than 40% of its fertilizer imports from the Middle East.

Bangladesh has suspended operations at four of its five factories, while in Egypt, nitrogen fertilizer production is threatened after natural gas exports from Israel were cut off.

In Brazil, which is almost entirely dependent on urea imports, about half of its supplies pass through the Strait of Hormuz.

In the US, farmers are already reporting market shortages, with the country about 25% below its usual season. Globally, urea exports are expected to decline significantly.

Prices have already risen sharply. In the Middle East, urea export prices have risen by about 40%, to more than $700 per ton, while in the US they have risen by up to 32%. Analysts warn that if the conflict drags on, nitrogen fertilizer prices could double.

The scope to make up for the losses is seen as limited. The Middle East dominates the global market, while Russia, the world's largest exporter of fertilizers, is facing drone attacks and China continues to restrict its exports./CNA