Strait of Hormuz Closure: U.S. Fertilizer Supply Exposure and Farm-Level Implications
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On February 28, 2026, the United States and Israel launched Operation Epic Fury, targeting Iranian nuclear and military infrastructure. Within days, Iranian retaliation resulted in the effective closure of the Strait of Hormuz to commercial shipping. The Strait is the world's most critical maritime chokepoint for fertilizer trade, and its closure poses meaningful supply and cost risks for U.S. and global agriculture at a time when input markets were already under pressure.
For ammonia and potash, the United States has effectively zero direct Gulf dependency. However, approximately 17% of U.S. urea consumption originates from Gulf producers, Qatar, Oman, Saudi Arabia, and the UAE, all physically blocked by the current closure. For phosphate, roughly 20% of U.S. consumption comes from the Gulf, and Saudi Arabia accounted for over half of U.S. ammonium phosphate imports in recent periods. Policy decisions have deepened this reliance: countervailing duties of up to 47% have effectively shut out Moroccan phosphate since 2021, and China has suspended phosphate exports through August 2026, leaving the U.S. highly reliant on Saudi supply.
Table 1 and Figure 1 frame the U.S. exposure in the global context. India faces the largest absolute volume disruption, nearly 10 MMT of fertilizer from the Gulf in 2024, representing approximately 54% of its total fertilizer imports. Brazil sourced about 45% of its urea imports from the Gulf, and Australia approximately 72%. Across all products, the U.S. received 2.0 MMT directly through Hormuz in 2024, compared with 4.5 MMT for Brazil and 9.8 MMT for India.
Table 1: Share of National Fertilizer Consumption Transiting Through the Strait of Hormuz.
Product | United States | Brazil | India | Australia | EU-27 |
Urea | 17% | 45% | 9% | 72% | 2% |
DAP/MAP | 20% | 15% | 17% | 22% | 0% |
Potash | 0% | 0% | 0% | 0% | 0% |
Ammonia | 0% | 0% | 81% | 0% | 5% |
Total volume | 2.0 MMT | 4.5 MMT | 9.8 MMT | 2.3 MMT | 0.1 MMT |
Note. Vulnerability is defined as imports from the Middle East divided by domestic consumption (production + total imports − total exports). Total volume reflects 2024 export volume from the Middle East for urea, DAP/MAP, potash, anhydrous ammonia, and sulfur.Source: NDSU using 2023 data from FATOSTAT (2022 data for U.S. production), IFASTAT, and the S&P Global Trade Atlas.
Figure 1: Global Fertilizer Exports Through the Strait of Hormuz.
Note. Arrow width indicates the export volume. Fertilizer includes anhydrous ammonia, DAP, MAP, sulfur, and urea.
Source: NDSU using 2024 export data from the S&P Global Trade Atlas.
A less visible but potentially significant risk runs through the global sulfur market. All phosphate fertilizers, DAP, MAP, and TSP, require sulfuric acid as a key input, and the Gulf supplies roughly 44% of the world's seaborne sulfur as a refining byproduct. When the Strait closes, that feedstock stops flowing to phosphate producers in China, Morocco, and Indonesia, who have no direct connection to the conflict. China entered the crisis with an estimated 1.5 to 2 months of sulfur inventory. Morocco's OCP, the world's largest phosphate exporter, relies on roughly 3.7 MMT of Gulf sulfur each year. Combined with China's existing phosphate export suspension and the blockage of Saudi Ma’aden output, this means three of the five largest global phosphate suppliers are now simultaneously constrained. Figure 2 illustrates the cascade mechanism.
Figure 2: The Sulfur Cascade-How the Hormuz Strait Closure Disrupts Phosphate Production Worldwide.
Source: NDSU using 2024 trade data from the S&P Global Trade Atlas, Argus Media, CRU Group, and The Fertilizer Institute.
The 2022 Russia–Ukraine crisis remains the most recent benchmark for a major fertilizer supply disruption. That event sent urea to $925/MT, anhydrous ammonia above $1,635/ton at retail, and DAP above $1,000/ton. Both crises share a common feature: a major fertilizer-supplying region abruptly removed from the global market. But several critical differences shape how this disruption plays out for farmers.
First, the mechanism differs. In 2022, Russian fertilizer was rerouted, not physically removed. Sanctions redirected trade flows, but the product eventually found buyers. In 2026, Gulf product is physically trapped behind a closed Strait with no viable exit. Storage fills, plants shut down, and the product simply does not reach global markets.
Second, and more important for farm economics, is the grain market context. In 2022, the Black Sea disruption sent wheat up over 50% and corn up 20%, and those higher crop prices partially offset rising input costs. The Persian Gulf is not a significant food exporter. A comparable grain price surge is not expected to cushion this shock. In the first week of the crisis, corn is up just 1.2% and soybeans 2.6%.
This asymmetry defines the risk for U.S. farmers. In 2022, $1,000+ DAP was cushioned by $6–7 corn. In 2026, farmers could face similar fertilizer price peaks with corn at $4.00–4.50/bushel and soybean margins already negative, meaning the fertilizer-to-crop price ratio could reach levels not seen in recent history.
The critical unknown is how long the Strait remains closed to commercial shipping. A brief disruption would push prices higher but leave supply chains largely intact. A two-month or longer closure would pressure planting decisions for fertilizer-intensive crops and could drive DAP and urea prices toward or past their 2022 highs. Reopening commercial transit may also lag behind any ceasefire, since war-risk insurance coverage takes time to restore. For U.S. producers, the core vulnerability is the combination of direct exposure to urea and phosphate, a highly constrained global phosphate market, and the lack of a corresponding increase in crop prices to absorb the cost.
Learn More:
Arita, S., Chakravorty, R., Kim, J., Lwin, W., and Steinbach, S. (2026). Strait of Hormuz Closure and Global Fertilizer Trade Disruptions. NDSU Agricultural Trade Monitor 2026‐03. Center for Agricultural Policy and Trade Studies, North Dakota State University. March 12, 2026. doi: https://doi.org/10.22004/ag.econ.396250