This is an updated version of an article first published in the Pro Farmer weekly newsletter on April 10.
The two-week ceasefire between the U.S. and Iran struck on April 7 sent the crude complex as well as biofuel-sensitive vegetable oils into a corrective tailspin on expectations the Strait of Hormuz would reopen to traffic, easing a chokehold on crude, natural gas and fertilizer shipments from the Persian Gulf. But the ceasefire instead got off to a shaky start, underlining that social media posts and headlines continue to drive the market and stoke uncertainty.
The failure of weekend negotiations in Islamabad saw President Donald Trump on Monday implement a U.S. naval blockade on the Strait, moving to block shipments of Iranian oil and raising questions about the durability of the ceasefire.
The bottom line is that few ships have traversed the strait, leaving the world in a precarious position as economies depend on oil and fertilizer imports that typically travel through the world’s most famous maritime chokepoint.
Fresh U.S. Tariffs
Further complicating the outlook, Trump on April 8 announced 50% tariffs, “effective immediately and with no exceptions or exemptions,” on nations supplying Iran with weapons. Russia would seem almost certain to be subject to the duties, as the two countries have a long-standing military partnership.
Taken at face value, this would further tighten U.S. supplies as Russia stands as the world’s second largest fertilizer producer and the top exporter. Its fertilizer has largely been exempted from previous sanctions stemming from its invasion of Ukraine, measures taken to avoid exacerbating global food insecurities. In recent years, the U.S. has imported around a third of its urea from Russia.
Darrin Boster, president of Elevar Agri-Solutions, estimates the world is around 2 MMT short of its total urea needs. But sulphur is a growing concern. Over 90% of the world’s supply is a by-product of oil refining and natural gas processing. Idled refinery operations in the Middle East have exacerbated a structural deficit that began in 2025 as demand has outpaced supply growth. That increased demand has stemmed from phosphate fertilizers to produce MAP/DAP, as well as battery materials and new energy. Other production constraints are due to slow recovery in Russian production, refinery maintenance and logistic issues.
Moreover, the Mosaic Company announced it has begun idling and demobilizing its Araxá Mining and Chemical Complex, along with related mining activities at the Patrocínio Complex in Brazil – which is expected to reduce global phosphate production by 1 MMT. It could also trim production further if margins are squeezed. “Phosphorus rock is a finite source, so selling at little margin isn’t economically feasible,” notes Boster.
This could ultimately underpin phosphate prices for the foreseeable future, with current forecasts of snug supplies into 2027, though demand destruction could spur a price correction.
Adequate supplies of UAN, NH3
Urea ammonium nitrate (UAN) supplies in the U.S. are also tighter-than-usual, though not as tight as urea. Inventories are near normal seasonal levels in many areas, as the U.S. produces a large share of its UAN domestically.
When it comes to anhydrous ammonia (NH3), there is no severe shortage in the U.S. in comparison to urea, though supplies are tight and logistical constraints have contributed to a significant price surge. Supplies have been more problematic regionally, in inland markets and in the southern Plains.
Moving forward, the U.S. remains relatively well positioned for NH3 due to strong domestic production, though prices may stay elevated, with potential for localized tightness. In the longer-term, new U.S. plants are expected to come online and could ramp up supply later in 2026 and 2027. But a global nitrogen shortage could mean increased NH3 exports out of the U.S., which could continue to affect prices into 2027.
The fate of global fertilizer supplies in 2026 and beyond hinges on geopolitics. The conflict in the Middle East has exposed how dependent the world remains on a handful of producers and chokepoints.
Looking ahead
A survey conducted on behalf of the National Corn Growers Association and released on April 8 found that for every one farmer expressing greater concern about fertilizer price and availability for the 2026 crop, there were nearly two farmers expressing greater concern for the 2027 crop.
The coming months will test global food security. If stability returns to the Strait of Hormuz and diplomacy prevails, fertilizer markets may ease by late 2026. If not, the world risks another round of food inflation and production shortfalls. Either way, it appears the era of cheap, abundant fertilizers will remain a bygone notion.
