The closure of the Strait of Hormuz is subjecting global fertilizer supply chains to an unprecedented strategic stress test. Twenty-one percent of global urea trade and 15% of ammonia trade rely heavily on this energy chokepoint in the Middle East, with major agricultural nations such as India, South Korea, Brazil, and the United States bearing the brunt of the impact. As the fertilizer supply system—already fragile in the wake of the Russia-Ukraine conflict—faces another blow from a geopolitical disruption, a chain reaction of crises stretching from farm to table is looming. This is not merely a matter of energy security; it is a major strategic test of food security and the resilience of global supply chains.

Geopolitical Chokepoints: Exposing the Vulnerabilities of the Global Fertilizer Supply Chain

The disruption of shipping through the Strait of Hormuz represents far more than the severing of a single shipping route for the global fertilizer trade; it signifies the strategic loss of a core node in the entire supply system. According to Rui Zhi De Energy’s 2025 Trade Map, approximately 15% of global ammonia exports and 21% of urea exports are directly linked to Middle Eastern countries affected by the closure of the Strait. Saudi Arabia, Qatar, Kuwait, the United Arab Emirates, Iran, and Iraq—these Gulf nations are precisely the irreplaceable “critical few” in the global fertilizer supply chain. Global urea trade volume stands at approximately 50.8 million metric tons per year, of which about 10.6 million metric tons originate from these affected countries; global ammonia trade volume is approximately 10.9 million metric tons per year, with about 1.6 million metric tons exposed to the risk of supply disruption.

The ripple effects of this disruption are rapidly spreading to end-users. India, which imports approximately 2.2 million tons of urea annually from Gulf nations in the Middle East, is the hardest-hit country. Asia-Pacific economies such as South Korea, Thailand, and Australia are equally reliant on this trade artery, while the urea supplies of major agricultural powers like Brazil and the United States are also deeply embedded in this shipping route. More alarmingly, secondary markets that rely on transshipment trade will face a double blow.

This geopolitical disruption has exposed a fundamental strategic vulnerability in the global fertilizer supply chain: the high degree of overlap between core supply sources and key transportation routes. When the chokepoint handling roughly one-fifth of global fertilizer trade is severed, no importing nation can easily find an alternative. This is not an isolated incident, but rather the second systemic blow to the global fertilizer trade corridor following the Russia-Ukraine conflict.

The Dilemma of Substitution: High Costs and Long-Term Commitments Create a Gap

When traditional supply channels are blocked, finding alternative sources becomes a strategic imperative. However, the actual scope for choice is far narrower than imagined, exposing the “rigid” nature of the global fertilizer supply chain.

In theory, fertilizer producers with overseas assets could ramp up production to fill the gap. However, most of this capacity is located in regions with high production costs, such as Europe. With volatile natural gas prices and strict environmental regulations, nitrogen fertilizer production costs in Europe are far higher than in the Gulf region. If European capacity is forced to activate emergency supplies, the ultimate result will be a sharp rise in food production costs passed on to consumers. This approach essentially trades inflation for supply security.

Another option that has raised high hopes is green ammonia. Recent tenders in India indicate that green ammonia prices are already approaching those of conventional ammonia. However, large-scale substitution is still a long way off. Whether it is the green ammonia supply agreement between Uniper and AM Green or the procurement contract between Yaran and ATOME, the actual delivery dates point to around 2030. For the potential supply disruption crisis unfolding today, these long-term commitments are like water from a distant source that cannot quench an immediate thirst.

The essence of this substitution dilemma lies in the global lack of sufficiently flexible and large-scale strategic buffer capacity to absorb the shock of a disruption at the Strait of Hormuz. Alternative production capacity is either prohibitively expensive, insufficient in scale, or not yet operational; the combination of these factors creates a strategic gap that cannot be bridged in the short term.

Strategic Reconstruction: Energy and Food Security Must Be Addressed Together

The Strait of Hormuz crisis has sent a clear strategic signal to global policymakers: the vulnerability of the global fertilizer supply chain is binding energy security and food security into a complex problem that must be solved together.

From the supply side, the high concentration of global fertilizer trade has become a systemic strategic risk. The successive disruptions to the two main supply routes reveal a deeper issue: the “few sellers, single route” model on which the global fertilizer market has long relied is no longer sustainable in an era marked by the convergence of energy transition and geopolitical turmoil. Any supply system that relies on a single node or a single route will become a “leveraging point” for adversaries.

From the demand side, importing nations face a “double exposure” risk. Countries such as India, South Korea, and Thailand are not only vulnerable to the shock of supply disruptions from the Middle East but also lack the strategic buffer of domestic production capacity. From rice to corn, and from soybeans to wheat, the production of major global staple crops will be affected. This is no longer merely a cost issue, but a strategic matter of upholding the bottom line of national food security.

This crisis has charted the course for a strategic restructuring of supply chains: diversifying supply sources by accelerating the development of emerging fertilizer-producing regions in Africa and Central Asia; re-examining technological pathways, as the strategic value of green ammonia lies in severing dependence on fossil fuels; and establishing strategic reserve systems, with importing nations needing to create fertilizer strategic reserve mechanisms to address sudden supply disruptions.

The closure of the Strait of Hormuz has ultimately pushed the global fertilizer industry to a strategic crossroads: should it continue to rely on a highly concentrated supply system and accept the cyclical shocks caused by geopolitical disruptions, or should it restructure its supply chain layout to seek a new strategic balance between security and efficiency? This choice will profoundly impact the stability and resilience of the global food system for decades to come.

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