Global oil and gas prices have skyrocketed following the US attack on Iran last weekend. But another key global supply chain is also at risk, one that may directly impact American farmers who have already been squeezed for months by tariff wars. The conflict in the Middle East is choking global supplies of fertilizer right before the crucial spring planting season.
“This literally could not be happening at a worse time,” says Josh Linville, the vice president of fertilizer at financial services company StoneX.
The global fertilizer market focuses on three main macronutrients: phosphates, nitrogen, and potash. All of them are produced in different ways, with different countries leading in exports. Farmers consider a variety of factors, including crop type and soil conditions, when deciding which of these types of fertilizer to apply to their fields.
Potash and phosphates are both mined from different kinds of natural deposits; nitrogen fertilizers, by contrast, are produced with natural gas. QatarLNG, a subsidiary of Qatar Energy, a state-run oil and gas company, said on Monday that it would halt production following drone strikes on some of its facilities. This effectively took nearly a fifth of the world’s natural gas supply offline, causing gas prices in Europe to spike.
That shutdown puts supplies of urea, a popular type of nitrogen fertilizer, particularly at risk. On Tuesday, Qatar Energy said that it would also stop production of downstream products, including urea. Qatar was the second-largest exporter of urea in 2024. (Iran was the third-largest; it’s also a key exporter of ammonia, another type of nitrogen fertilizer.) Prices on urea sold in the US out of New Orleans, a key commodity port, were up nearly 15 percent on Monday compared to prices last week, according to data provided by Linville to WIRED. The blockage of the Strait of Hormuz is also preventing other countries in the region from exporting nitrogen products.
“When we look at ammonia, we're looking at almost 30 percent of global production being either involved or at risk in this conflict,” says Veronica Nigh, a senior economist at the Fertilizer Institute, a US-based industry advocacy organization. “It gets worse when we think about urea. Urea is almost 50 percent.”
Other types of fertilizer are also at risk. Saudi Arabia, Nigh says, supplies about 40 percent of all US phosphate imports; taking them out of the equation for more than a few days could create “a really challenging situation” for the US. Other countries in the region, including Jordan, Egypt, and Israel, also play a big role in these markets.
“We are already hearing reports that some of those Persian Gulf manufacturers are shutting down production, because they're saying, ‘I have a finite amount of storage for my supply,’” Linville says. “‘Once I reach the top of it, I can't do anything else. So I'm going to shut down my production in order to make sure I don't go over above that.’"
Conflict in the strait has intensified in the early part of this week, as the Islamic Revolutionary Guard Corps have reportedly threatened any ship passing through the strait. Traffic has slowed to a crawl. The Trump administration announced initiatives on Tuesday meant to protect oil tankers traveling through the strait, including providing a naval escort. Even if those initiatives succeed—which the shipping industry has expressed doubt about—much of the initial energy will probably go toward shepherding oil and gas assets out of the region.
“Fertilizer is not going to be the most valuable thing that's gonna transit the strait,” says Nigh.
Global demand for fertilizer has outpaced supply for several years; while the US produces some of its own fertilizer, it’s not enough to close the gap. Making matters worse, China, the world’s largest phosphate producer and one of its largest exporters, announced last year that it would concentrate its fertilizer supply to meet domestic demand, suspending all exports until August. This takes a key market out of play right when it’s needed most.
March is traditionally the start of planning the spring planting season in the US, which starts in earnest in April. US fertilizer buyers would normally be placing orders now, Linville says, in order to have the barges arrive in the US by early April. “If we lose several weeks here, we are talking about limiting the number of tons that arrive in our most important month,” he says.
Nigh says that most fertilizer demand in the US—around three-quarters—goes to large row crops grown in the Midwest, like corn, soy, wheat, and cotton. These farms are large operations; most farmers, she says, have made decisions about what types of fertilizers their crops will need and would be unable to pivot despite changes in global supply. “It’s a very critical window right now,” she says.
When energy markets are tight, the US has some reserve supplies—the Strategic Petroleum Reserve, the largest emergency supply of oil in the world—that it can release to help meet demand. But there’s no similar buffer for fertilizer, Nigh says.
If the war keeps going, both Nigh and Linville say that US farmers—especially those growing cash crops like corn and soybeans—will most likely see increased prices for fertilizers of all kinds. US farmers are already facing big losses after the trade war with China, one of the largest customers for both US corn and soybeans, put steep tariffs on US exports and cratered demand as China increasingly buys from other customers. An $11 billion bailout from the Department of Agriculture late last year, farming industry representatives say, will only help to cover part of their losses.
Depending on how long the conflict drags, there could be price rations on US farmers in the near future. Nigh says that some farmers may have to make trade-offs, choosing to ration fertilizer over their fields or fertilizing some acres and not others.
Linville takes it one step farther. “In the worst-case scenario, there's only so many tons to go around, and the market has to start figuring out, well, who's the highest bidder for that product? Somebody's gonna go without and have to plant something else that doesn't need nitrogen,” he says. “That’s an absolute worst-case scenario. But given the way the situation is, we have to discuss the worst-case scenario.”
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