Renewed U.S./Iran Strikes Put Fertilizer Markets Back on a War Footing

A month of easing nitrogen prices is suddenly at risk: the ceasefire has collapsed, tanker traffic through the Strait of Hormuz has been cut roughly in half, and the Gulf’s outsized share of world urea, ammonia and sulfur exports is back in limbo just as farmers begin pricing fall inputs

The fragile U.S./Iran ceasefire that reopened the Strait of Hormuz in mid-June has come apart. After Iranian forces struck three commercial vessels on July 7 and another ship over the weekend, the United States launched successive waves of attacks against Iranian missile, drone, radar, air-defense and naval targets. On Monday, July 13, Iranian officials reported additional U.S. strikes around Qeshm Island, Bandar Abbas and Abadan, while President Donald Trump reinstated the blockade of vessels serving Iranian ports, declared the United States the “guardian” of the strait and announced a 20% charge on cargo receiving U.S.-protected passage. Iran answered with missile and drone attacks that it said targeted U.S. facilities in Bahrain and Kuwait, radar systems in Oman and fuel and ammunition depots at Prince Hassan Air Base in Jordan. Tehran also reaffirmed its claim to control Hormuz, rejected any U.S. role in managing the waterway and warned that continued American intervention could trigger broader disruptions to global oil and gas flows. Vessel activity through the strait fell about 52% from July 10 to July 12. For fertilizer markets, which had only just begun to exhale, the renewed fighting lands at the worst possible moment in the crop-input calendar.

Why Hormuz is a fertilizer chokepoint, not just an oil one

The Persian Gulf is to nitrogen what it is to crude. The region supplies roughly a quarter to a third of globally traded urea — IFPRI puts the Gulf share at 36% of urea exports and 29% of ammonia, with about half of the world’s traded sulfur, the feedstock for phosphate processing. Nearly all of it moves through Hormuz. Natural gas is the second exposure: gas is the principal input for ammonia synthesis, and energy can account for up to 70% of nitrogen production costs. Iran’s March strike on Qatar’s Ras Laffan complex knocked out an estimated 17% of Qatari LNG capacity — damage expected to take years to fully repair — sending Asian spot LNG up more than 140% and forcing gas-dependent producers from Europe to India to curtail ammonia output.

The first round of the war showed how quickly that exposure translates into farm-gate prices. World Bank data show international urea topping $850 a metric ton in April, up 80% from February and the highest since 2022. At the U.S. retail level, farmdoc daily calculates anhydrous ammonia jumped from a pre-conflict average of $828 a ton to $1,123 by mid-April, adding roughly $27 an acre to corn fertilizer costs. Farmers responded the way economics predicts: half of corn growers cut application rates, and corn plantings fell to 95.3 million acres from an expected 98.8 million as acres rotated toward less nitrogen-hungry soybeans.

A Four-Week Reprieve, Now in Doubt

The June 17 MOU reopened the Strait of Hormuz to commercial traffic on a toll-free basis for 60 days, ended the U.S. blockade of Iranian shipping and committed Washington to issue waivers permitting Iranian oil exports. That reprieve produced a swift retreat in nitrogen prices, but its commercial foundations were already crumbling before Monday: Washington revoked an Iranian oil-sales license on July 7, and President Donald Trump announced July 13 that the United States would reinstate its blockade of Iranian ships and impose a 20% charge on eligible cargo receiving U.S.-protected passage through the strait.

DTN’s retail survey for June 29 through July 2 showed urea down 12% from a month earlier to $718 per ton, UAN32 down 9% to $533, anhydrous down 7% to $1,036 and UAN28 down 6% to $504. Six of the eight major fertilizers declined for a third consecutive week, extending a full month of mostly lower prices. But the retreat only partially unwound the war premium: anhydrous remained 35% above a year earlier, and all eight fertilizers still cost more than they did in early July 2025. Those figures were collected before the July 7 attacks on commercial shipping, the ensuing U.S. strike waves and Monday’s blockade and transit-charge announcement. They are a snapshot of the fertilizer market the renewed escalation has now hit.

Phosphate and potash have so far been much steadier than nitrogen, but phosphate should not be treated as insulated. DAP averaged $910 per ton in the DTN survey, slightly higher than a month earlier, while MAP eased slightly to $953. Potash averaged $494, only 3% above a year earlier. Potash remains the least directly exposed to Hormuz because Canada supplied 79% of U.S. potash imports during 2021–2024, with those supplies moving largely through North American rail networks rather than Gulf shipping lanes.

Phosphate’s less visible vulnerability is sulfur, the feedstock used to produce the sulfuric acid needed for DAP and MAP manufacturing. Persian Gulf producers account for roughly 44% of internationally traded sulfur, including supplies used by major phosphate-producing countries such as Morocco and China. A prolonged shipping disruption — or a 20% transit charge layered onto higher freight and insurance costs — could therefore raise phosphate-production costs well beyond the Gulf. Potash remains the relative safe harbor; phosphate is the sleeper risk.

What renewed fighting means from here

Three things bear watching. 

First, timing: the U.S. spring-application season is safely past, but fall anhydrous bookings and 2027 crop budgets are being penciled in now, and wholesale nitrogen values will react well before retail surveys catch up. 

Second, the gas channel: every week Ras Laffan runs below capacity and Qatari cargoes sit bottled up, marginal ammonia production costs stay elevated worldwide — the World Bank already projects urea prices to average nearly 60% higher in 2026, with potash up about 12% and DAP about 6%. 

Third, demand destruction abroad: import-dependent regions — Africa, South Asia and Brazil, which imports nearly 60% of its fertilizer — cut purchases hardest when prices spike, with consequences for 2027 grain and oilseed supplies that could ultimately matter more to U.S. farm prices than the input bill itself.

For U.S. producers, the cushion is that domestic nitrogen capacity, cheap domestic gas and the recently announced $500 million USDA fertilizer-expansion initiative blunt the worst of the global squeeze. The exposure is that U.S. retail prices still track the world market — and the world market has just been reminded that a third of its seaborne fertilizer trade depends on a 21-mile-wide strait that two combatants are again fighting over. If the past week’s pattern of strike and counterstrike hardens into a reclosure of Hormuz, the April highs are the obvious reference point. A quick de-escalation, by contrast, would likely resume June’s slow deflation of the war premium. Either way, farmers making fall fertilizer decisions should treat the current price sheet as perishable.
 

Retail anhydrous ammonia and UAN 28% prices spiked after the February attack on Iran and the closure of the Strait of Hormuz, then retreated after the June 17 MOU — a retreat now threatened by renewed strikes.

U.S. retail fertilizer prices on the eve of the renewed strikes

DTN retail survey, week ended July 2, 2026 — the last full reading before the July 7–9 escalation.

Source: DTN weekly retail fertilizer survey. “Higher” indicates DTN reported the price above year-earlier levels without specifying the percentage.