By Gerald Mashange and Grant Gardner
Strait of Hormuz is a critical chokepoint for fertilizer markets because of its role in both energy and input trade. Roughly 20 million barrels per day of oil move through the Strait, along with nearly all liquefied natural gas (LNG) exports from Qatar and the UAE. Because natural gas is the primary feedstock for nitrogen fertilizer production, disruptions to this flow directly raise production costs and tighten global supply.
The Strait is also a major route for fertilizer shipments, with about one-third of global seaborne volumes passing through it, heavily concentrated in urea and phosphate products. Disruptions increase freight and insurance costs, delay shipments, and further constrain availability.
Why Shipping Through Hormuz Remains Below Normal
Figure 1 highlights the scale of disruption following the onset of conflict. Vessel traffic fell from roughly 84 ships per day before February 28 to just 7 ships per day during the peak disruption, while trade volumes declined by more than 90%. Conditions have improved modestly since the ceasefire, but flows remain well below pre-conflict levels.
This sustained slowdown in a key global shipping corridor has constrained both energy and fertilizer movements, helping explain why fertilizer prices, particularly nitrogen, have remained elevated heading into the planting season.
Fertilizer Prices Continued to Move Higher
Fertilizer prices were already trending higher before the recent conflict, but disruptions to global energy and trade flows have accelerated that increase. Prices remain well above pre-pandemic levels, with nitrogen fertilizers seeing the strongest upward pressure.
Figure 2 shows weekly price movements for key nitrogen products, including anhydrous ammonia, urea, UAN28, and UAN32. Prices began rising in early 2026 and accelerated following the February 28 escalation in the Strait of Hormuz. Despite the April 8 ceasefire, prices have continued to trend higher, indicating that supply constraints remain in place.
By mid-April 2026, anhydrous ammonia averaged $1,114 per ton, with UAN32 at $579 and UAN28 at $520. Since mid-February, prices have increased 29% for ammonia and roughly 25% for UAN solutions. Urea prices reached $858 per ton, up 41% over the same period. Year-over-year gains are even larger, with ammonia up more than 40%.
Taken together, the data show that nitrogen fertilizers are driving the current price increase, reflecting their direct link to natural gas markets and global supply disruptions tied to reduced shipping through key trade routes.
Source : uky.edu