Rising tensions in the Middle East are drawing attention to the risk of higher oil prices, but energy is not the only global system that could be affected.
Experts warn that disruptions in the Strait of Hormuz could trigger a fertilizer shock that threatens agricultural production and food prices worldwide.
The narrow waterway plays a crucial role in global trade. While it is widely known as a vital route for oil and gas exports, it is also a key shipping channel for fertilisers and the energy needed to produce them.
If the conflict involving Iran disrupts shipping through the strait, the impact could extend well beyond fuel markets.
Fertiliser Is Essential to Modern Agriculture
Modern farming relies heavily on nitrogen-based fertilisers to maintain crop yields.
The foundation of these fertilisers comes from a chemical process developed by scientists Fritz Haber and Carl Bosch in the early 20th century.
Their breakthrough method made it possible to produce ammonia from natural gas on an industrial scale. Ammonia is then converted into nitrogen fertilisers such as urea, one of the most widely used agricultural nutrients.
These fertilisers play a critical role in maintaining yields for crops such as wheat, maize, and rice. Without them, global food production would fall sharply.
Strait of Hormuz Is Central to Fertiliser Trade
A significant portion of the world’s fertiliser supply moves through the Strait of Hormuz.
Roughly one-third of globally traded urea shipments pass through this narrow maritime corridor. The Persian Gulf region has become a major hub for fertiliser production because it offers access to some of the world’s cheapest natural gas, which is essential for ammonia manufacturing.
Countries including Qatar, Saudi Arabia, and United Arab Emirates have invested heavily in fertiliser plants that serve international markets.
As a result, much of the world’s nitrogen fertiliser supply and liquefied natural gas used to power fertiliser production elsewhere travels through the same shipping route.
Disruptions Could Hit Farmers Worldwide
If shipping traffic through the Strait of Hormuz slows or stops, fertiliser shipments could face delays or rising transportation costs.
Even short disruptions can cause major problems for farmers because fertiliser purchases are closely tied to planting seasons.
Farmers in the northern hemisphere typically buy fertiliser in the months leading up to spring planting. If shipments fail to arrive on time, farmers may need to reduce fertiliser use, switch crops, or pay significantly higher prices.
Lower fertiliser application rates can sharply reduce crop yields. Even small reductions in nitrogen usage can lead to substantial declines in agricultural output.
Such declines could eventually ripple through food supply chains and raise global food prices.
Many Countries Depend on Fertiliser Imports
Although some countries produce fertilisers domestically, global agriculture remains highly dependent on international trade.
India relies heavily on imported liquefied natural gas from the Persian Gulf to operate its fertiliser plants.
Brazil depends on imported nitrogen and phosphate fertilisers to sustain large-scale production of soybeans and maize.
Even the United States imports significant quantities of fertiliser products to supplement domestic production and stabilize prices.
In regions such as sub-Saharan Africa, fertiliser use is already relatively low. Higher prices could reduce usage even further, increasing the risk of lower crop yields and food insecurity.
Energy and Agriculture Are Closely Linked
The fertiliser system is tightly connected to energy markets.
Natural gas is a critical input for nitrogen fertiliser production, meaning disruptions in gas supply can quickly limit fertiliser output.
Sulphur, another essential agricultural nutrient, is often produced as a byproduct of oil and gas processing. If energy production declines because of shipping disruptions, sulphur supply may also fall.
These connections highlight how closely energy security and food production are linked.
A Slow-Building Economic Shock
Unlike oil price spikes that affect consumers almost immediately, fertiliser shortages often take longer to appear in economic data.
Fuel prices can rise overnight, but crop yields become visible only months later when harvests occur.
Because of this delay, policymakers and central banks may underestimate the role fertiliser shortages play in driving food inflation.
Still, experts warn that the consequences could be significant if disruptions persist.
If shipping through the Strait of Hormuz remains unstable for an extended period, the world could face a fertilizer shock global food prices surge that reshapes agricultural markets and increases the cost of feeding millions of people.
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