The invisible grains of the crisis: how the war in Iran can shake the world's food supply

At dawn, in a warehouse in the American Midwest, a farmer looks at an invoice: the price of urea has skyrocketed by several dozen dollars per ton. It’s not just his problem. It’s the signal that a maritime node thousands of kilometers away – the Strait of Hormuz – is pulling the thread of a web that connects oil to fertilizers, and the latter to every bag of wheat, rice, or corn sown on the planet. On March 2, an advisor to the Iranian Revolutionary Guard Corps (IRGC) announced the "closure" of the maritime passage. Within hours, crude oil surged above $100 per barrel, while a quieter but more pervasive fear spread: a global fertilizer crisis that could translate into lower yields and food price increases well beyond the Middle East.

The breaking point: an announcement worth billions

On March 2, 2026, the general-advisor Ebrahim Jabari – a top figure supporting the commander-in-chief of the IRGC – declared the Strait of Hormuz "closed," threatening to strike ships attempting to pass through. In the oil market, the reaction was immediate: Brent surpassed $100 per barrel in several sessions, with even higher peaks in the following days, fueling the rise in energy costs worldwide. Even when analysts pointed out that the "closure" did not have the character of a formal legal blockade, the combination of military risk, radio alerts, and corporate directives was enough to halt much of the commercial traffic, with shipowners, insurers, and charterers ready to "secure" crews and assets.

The Strait of Hormuz is the most important energy bottleneck on the planet: an average of 20 million barrels per day of oil and products passed through here in 2024-2025, accounting for about a fifth of global consumption, in addition to a significant share of global LNG, primarily from Qatar. When the passage is blocked or becomes high-risk, it’s not just the oil flows at stake: the artery that transports crucial raw materials for producing fertilizers also gets jammed.

Why the energy crisis becomes a fertilizer crisis

The most widely used fertilizer in the world is urea. It is based on nitrogen and is produced using natural gas: when gas supply halts or prices rise, urea follows suit. Almost half of the urea traded globally – along with large volumes of other key substances such as ammonia, phosphates, and sulfur – originates from or passes through the Gulf countries and leaves the region through the Strait of Hormuz. This makes global agriculture extremely vulnerable to any disruption in that maritime funnel.

A quick report from UNCTAD published on March 10 estimates that about "one third of the world's maritime fertilizer trade" – approximately 16 million tons – passes through Hormuz. Flow analysis companies like Kpler describe a "severe" shock to fertilizer markets since the onset of the conflict, while other operational estimates confirm that, although some ships have managed to transit, most traffic has been diverted or suspended.

The Qatar Case: When the Urea Giant Stops

The crisis has had an energy epicenter in Qatar: following attacks and the resulting halt of LNG, QatarEnergy announced the interruption of production in various downstream sectors, including urea. Here operates QAFCO – Qatar Fertiliser Company, considered the largest "single-site" exporter of urea in the world, with a share of up to 14% of the global supply according to company and industry data. The gas blockade has therefore resulted in an immediate contraction of the global urea supply from one of its most strategic hubs.

Chain Effects: India and Bangladesh Tighten the Taps

With LNG shipments from the Gulf reduced or postponed, several fertilizer plants in India have halted or brought forward maintenance, including units of major players like IFFCO, due to lack of or increased gas supply. The choice is tactical – to stop in anticipation of better conditions – but it comes at the worst possible time: the start of the spring planting season in the northern hemisphere.

In Bangladesh, where urea is crucial for Boro (rice) cultivation, the gas squeeze has forced the temporary closure of 4-5 out of 6 plants within a few days, with authorities compelled to redirect methane towards electricity generation and plan extraordinary LNG imports for the months of March–May. Even when a single facility remains operational, the system as a whole weakens and dependence on imports grows.

Soaring Prices

In the markets, the tightening is evident in the price list: export prices from the Middle East for urea have surged in just a few weeks. According to reports from specialized companies, offers from the Gulf have risen from just under $500 to over $700 per ton by mid-March, with an increase close to 40%, while other sources report increases around 25–30% in key markets like the United States. The American Farm Bureau notes that urea and ammonia from the Middle East significantly impact U.S. imports; the same agricultural associations report delays and price increases in deliveries to retailers.

Beyond Energy

Nitrogen fertilizers are an essential input for most commercial crops: without adequate nutrition, plants produce less. According to the FAO and the OECD, the elasticity between fertilizer prices and food prices is significant: recent scenarios indicate that a simultaneous tightening on nitrogen, phosphorus, and potassium could raise the food price index by up to 6% in the coming years; research from the IMF has estimated that about 45% of fertilizer price changes are reflected in cereal prices within four quarters. In short: when urea prices soar, grocery carts follow.

The timing is deadly. In the Northern Hemisphere, the spring planting window roughly runs from mid-February to early May: weeks during which large quantities of fertilizers are purchased and spread. If availability drops or prices explode at that moment, many farmers reduce dosages or skip treatments. Yields compress months later, when it comes time to harvest. It’s the classic “delay” with which fertilizer shocks become food shocks.