Developments in the war with Iran are unfolding at breakneck speed. Since February 28, the day the conflict broke out, almost everyone in the region has been impacted, if not directly then at least indirectly, and so have many people who live far from the fighting. Understandably, the world is focusing its attention on the reports from the front, but there’s a related story that is very important and it’s getting little attention. That’s unfortunate because it could have a major impact on global food supplies, their prices, inflation, the markets, and possibly even on important political developments in the U.S. and abroad. That story is about fertilizers.
Fertilizers are often called food for plants because “they provide nutrients for plants to grow and thrive,” according to fertilizer.org. Plants need carbon, hydrogen, and oxygen, and they get them from the atmosphere and from water. But they also need many other essential nutrients such as nitrogen, phosphorus, potassium, and sulfur, and those come from fertilizers.
Mineral fertilizers play a crucial role in the food chain as they increase the quantity of food that can be grown on a fixed area of land. “Approximately half the food we eat today has been produced thanks to mineral fertilizer,” fertilizer.org reports.
Here’s the problem: A significant percentage of the world’s fertilizers come from the Mideast and are usually shipped through the Strait of Hormuz. But now, because of the war, this route is closed, shipments cannot be made, and the prices of fertilizers are soaring.
This would be a serious problem any time, but it is particularly so now because farmers need them for the spring planting season. If delays in shipments continue, it will lead to very serious problems for everyone from farmers to consumers.
According to an article in Forbes by Robert Rapier, nearly one quarter of globally traded nitrogen fertilizer normally travels through the Strait of Hormuz, and those shipments are on hold. Significant quantities of other fertilizers are also shipped through this route, and now those, too, are not being made.
According to the Economic Collapse Blog, fertilizer prices were already exceptionally high even before the war erupted; now they’re significantly higher. Very recently Maersk, the second-largest shipping company in the world, suspended all cargo bookings for the UAE, Saudi Arabia, Bahrain, Kuwait, Oman, and Iraq.
“In addition to potentially facing the worst energy crisis in more than 50 years, we’re also potentially facing a historic fertilizer crisis,” the blog notes. If this war does not end quickly, “there could be a worldwide food price shock that will hit impoverished countries extremely hard.” In fact, this could remain a problem even if hostilities stop immediately because the Iranians have damaged numerous commercial vessels.
U.S. Feels Repercussions
Unfortunately, this problem extends to many countries, including the U.S. “Approximately 47.9 million Americans, about 1 in 7 households, lived in food-insecure households in 2024, experiencing a lack of consistent access to enough food for an active, healthy life,” writes feedingamerica.org. “This includes over 14 million children. Furthermore, an additional 5.4% of U.S. households (7.2 million people) experienced very low food security.”
Higher food prices caused by rising costs of fertilizer will exacerbate this problem, and so will the spike in the price of a barrel of oil, which was recently trading at the highest level since March 2022.
Traffic Jam
According to a report on Reuters, at least 200 ships—oil and liquefied natural gas tankers, as well as cargo ships and other vessels—are at anchor in open waters off the coasts of major Gulf producers including Iraq, Saudi Arabia, and Qatar. And hundreds of other vessels remain outside of Hormuz, unable to reach their intended destinations. Analysts suggest that some companies will purchase whatever fertilizer is available now, regardless of the price. In other words, their urgency to obtain supply may be driving prices higher than what they otherwise would be.
This situation is a very unusual one: the supply of fertilizer has declined because of shipping problems, there’s higher demand because the U.S. is entering spring planting season, the price of oil is higher than it’s been in a long time, and the price of natural gas, the primary raw material used to make important fertilizers, has also surged—essentially conditions for a perfect storm.
“The timing of the conflict literally could not be worse for the industry,” said Josh Linville, vice president for fertilizers at brokerage StoneX Group. “There is never a good time for war, but this couldn’t be much worse.”
It’s no surprise that the prices of fertilizer, natural gas, oil, and related items are affected by the developments in the war, and each one is significantly higher now than it was before the conflict began. If this continues for an extended period of time, expect to see higher food prices and possibly shortages.
Unprecedented Crisis
On Tuesday, March 10, Iran began to mine the Strait of Hormuz. This was not only a major escalation in the fighting, but one that could keep the Strait closed for the foreseeable future. In this event, the world would have to deal with an unprecedented crisis because more than 20 million barrels of oil are typically shipped through the Strait daily, which is roughly 20% of the world’s total global consumption; so too is a comparable percentage of its liquefied natural gas.
Developments are breaking fast and among them: The Iranians have launched a drone attack on the Dubai International Airport, one of the most important in the region, and are threatening financial institutions and major banks. The Iranians are also warning that oil will reach $200 per barrel, a price so exorbitant that it would wreak havoc on global markets and economies.
Storm Brewing?
According to Wired, global demand for fertilizer has outpaced supply for several years, and although the U.S. produces some of its own fertilizer, it’s not enough to close the supply-demand gap. Making matters still worse, China, the world’s largest phosphate producer and one of its largest exporters, announced last year that it would concentrate its fertilizer supply on meeting domestic demand, suspending all exports until August. This takes a key supplier out of play when it’s needed most.
So, the developments in the following days and weeks will determine the impact on the economy. If the war ends very soon, the system will probably absorb the shocks without severe damage. On the other hand, if Iran uses secret weapons, is able to “tough out” the bombing, or severely damages oil and shipping infrastructure in the region, we could be talking about a very different ball game. Let’s hope and pray for the best.
Sources: feedingamerica.org; fertilizers.org; forbes.com; reuters.com; wired.com
Gerald Harris is a financial and feature writer. Gerald can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.