Hormuz Closure Raises Risk of a Global Fertilizer Shock
An NDSU report warns a prolonged Strait of Hormuz closure could disrupt fertilizer trade, tighten phosphate and nitrogen supplies, and raise input costs for U.S. farmers
In a March 2026 Agricultural Trade Monitor (link), Shawn Arita, Rwit Chakravorty, Jiyeon Kim, Wuit Yi Lwin, and Sandro Steinbach of North Dakota State University’s Center for Agricultural Policy and Trade Studies warn that the effective closure of the Strait of Hormuz has become a major choke point for global fertilizer trade, not just energy markets. The report argues that the disruption is especially serious because the Gulf accounts for about 43% of global urea exports, 44% of seaborne sulfur, 27% of ammonia exports, and meaningful phosphate volumes, leaving little room for rerouting if the waterway stays closed.
The report’s central point is that the Strait of Hormuz is a far more important artery for fertilizer and fertilizer feedstocks than many people realize. Since March 2, commercial shipping through the strait has effectively halted following Operation Epic Fury and Iran’s retaliation against Gulf shipping. NDSU says that from 2020 to 2025, roughly 2.1 million to 3.2 million metric tons of fertilizer products moved through Hormuz each month, including sulfur, urea, and anhydrous ammonia. In 2024 alone, the Gulf region accounted for 43% of global urea exports, 44% of sulfur exports, and 27% of ammonia exports. Unlike the Russia-Ukraine fertilizer shock in 2022, the authors argue that Gulf product trapped behind a closed chokepoint cannot easily be rerouted, making this a more physical and immediate supply interruption.
One of the most important insights in the paper is that the disruption is bigger than direct fertilizer shipments. The authors devote significant attention to sulfur, because sulfuric acid is required for all phosphate fertilizer production, including DAP, MAP, TSP, and phosphoric acid. Gulf producers account for about 44% of global sulfur trade, and that sulfur is a critical feedstock for phosphate manufacturers elsewhere. NDSU warns that a shutdown at Hormuz therefore creates a “cascade” effect: China loses sulfur needed to support domestic phosphate production, Morocco’s OCP Group loses key sulfur inflows, Indonesia faces similar constraints, and Saudi phosphate exports are themselves blocked behind the strait. The result is simultaneous pressure on several of the world’s major phosphate suppliers at once.
That sulfur cascade is what makes this report especially notable. The authors say the Hormuz closure does not just remove Gulf fertilizer from export markets; it also undermines production in countries far from the Persian Gulf. In 2024, sulfur shipments through Hormuz included about 3.9 million metric tons to China and about 3.6 million metric tons to Morocco. China, the world’s largest sulfur importer, sourced 46% of its sulfur imports from the Middle East and had only about 1.8 million metric tons of port inventory in late February — roughly one to one-and-a-half months of spring demand. Morocco depended on about 3.7 million metric tons of Gulf sulfur, while Indonesia sourced 60% of its sulfur imports from the Middle East. NDSU’s point is that these countries may not shut down production immediately, but they likely face higher sulfur prices, lower operating rates, and tighter phosphate availability worldwide.
The paper also stresses that global fertilizer supply chains were already tight before this latest shock. European nitrogen production has been operating at roughly 75% of capacity since the 2022 energy crisis because high gas costs have limited economically viable output. Russian ammonia exports never fully recovered after the Togliatti-Odesa pipeline disruption, even though Russian urea shipments later rebounded. China had already suspended phosphate exports through August 2026, cutting another potential relief valve for global markets. In other words, NDSU argues there is much less practical spare capacity available than headline nameplate capacity would suggest.
For the U.S., the report draws a mixed picture. It says the country is relatively protected in ammonia and potash, because domestic production covers more than 90% of ammonia needs and Canada supplies most potash imports. But U.S. exposure is more serious in urea and phosphate. NDSU estimates that about 17% of U.S. urea consumption and about 20% of U.S. phosphate consumption transit Hormuz. Saudi Arabia has become especially important in phosphate because Moroccan and Russian supplies face countervailing duties and China has suspended exports. So while the U.S. is not the most vulnerable country in absolute terms, it still has meaningful exposure to supply disruptions and, even more importantly, to price transmission from a much tighter world market.
The international comparison in the report shows that other farm economies are even more exposed. India is the most dependent in total volume terms, with nearly 9.8 million metric tons of fertilizer tied to Gulf supply in 2024. Brazil imported about 4.5 million metric tons via the Gulf and sourced around 45% of its urea this way. Australia is shown as particularly vulnerable on urea, with about 72% of national supply linked to Hormuz transit. By comparison, the EU-27 has minimal direct exposure on urea and phosphate, though it still faces indirect price effects. NDSU’s point is that a prolonged closure could reshape fertilizer competition globally, with the most import-dependent buyers facing the hardest squeeze first.
The report also connects the fertilizer story to broader market behavior. In the first week after Operation Epic Fury, WTI crude rose 46.7%, market volatility jumped 42.9%, and agricultural commodities posted more modest increases, including soybean oil up 8.5%, HRW wheat up 6.8%, soybeans up 2.6%, and corn up 1.2%. On the fertilizer side, urea jumped from $518 per metric ton on February 27 to $628 by March 9, a 21.3% increase. DAP rose 2.6%, MAP 1.9%, while potash was unchanged over that brief window. NDSU interprets this as evidence that the immediate shock is far more acute for fertilizer than for grain.
That leads to one of the report’s biggest conclusions: this is more of a fertilizer shock than a grain shock. In 2022, soaring fertilizer prices were partly offset by sharply higher crop prices because the Black Sea disruption hit grain exports directly. This time, the Persian Gulf is not a major grain-exporting region, so there is no similar revenue cushion for farmers. NDSU notes that before the crisis even began, fertilizer affordability ratios were already poor, with DAP affordability worse than during 2022 in some measures. If the strait remains closed for two to four months, the authors warn fertilizer prices could approach 2022 highs while corn remains around $4.00 to $4.50 per bushel and soybean margins are already negative. That would create a much harsher margin squeeze for producers than the last major fertilizer shock.
The report adds that policy and trade conditions could make matters worse. Although most finished fertilizers are exempt from the administration’s Section 122 tariffs, NDSU says earlier tariff pass-through already raised fertilizer costs in 2025. The upcoming USMCA review could also affect the duty-free flow of Canadian potash and ammonia, two areas that currently help insulate the U.S. market. This means the Hormuz disruption is hitting at a moment when U.S. fertilizer markets were already under pressure.
The bottom line from the NDSU analysis is that duration matters more than anything else. If the closure is brief, inventories and alternative sourcing may limit the damage. But if shipping remains paralyzed for weeks or months, the combination of direct Gulf supply losses, sulfur feedstock disruptions, already-constrained global phosphate trade, and weak crop-price offsets could push fertilizer costs sharply higher and weigh heavily on farm profitability in 2026.
