The supply shock resulting from the U.S.-Israel war with Iran could push fertilizer prices beyond the 2022 peak that followed Russia’s invasion of Ukraine, according to North Dakota State University’s latest monthly agricultural trade report published Thursday.
That’s just one conclusion in the wide-ranging Agricultural Trade Monitor, which illustrated the degree to which the effective closure of the Strait of Hormuz, the narrow waterway that connects the Persian Gulf with the world, has physically blocked the transport of a big chunk of globally traded fertilizer (see chart below).
The report notes the Gulf accounts for roughly 43% of seaborne urea exports, approximately 44% of seaborne sulfur, over a quarter of traded ammonia, and significant phosphate volumes via Saudi Arabia. Read the report here.
Here are some of the highlights and key charts:
2026 vs. 2022
The 2022 Russia-Ukraine fertilizer crisis sent urea to $925 a metric ton, anhydrous ammonia above $1,635/MT at retail, and DAP above $1,000/ton. The current crisis shares similarities but there are key differences. For one, the Gulf’s exposure is much higher. Also, Russian fertilizer wasn’t removed from the market in 2022, but was instead rerouted. In 2026, there are fewer options for products trapped behind a closed Strait. Urea was seen at $628/MT on Wednesday, up more than 21% from its level ahead of the hostilities. DAP was up 2.6% at $704/MT, while MAP was up 1.9% at $750/MT and potash was steady at $331/MT.
As the tables below illustrate, the current situation is more of a fertilizer shock than a grain-market shock when compared to 2022.
“The Black Sea grain disruptions that drove crop prices sharply higher in 2022 have no parallel here, meaning there is no corresponding revenue offset for farmers facing rising input costs,” NDSU economists wrote. “The key uncertainty in 2026 is how long the Strait will remain closed. A prolonged closure could push fertilizer prices toward or beyond 2022 peaks, compressing farm income margins in ways that 2022 did not.”
In 2022, Russia and Ukraine together accounted for roughly 30% of global wheat exports and 20% of corn exports, the report noted. The disruption to grain trade sparked a rally that saw wheat futures surge over 50%, while corn rose 20%, allowing elevated crop prices to partially offset the pain of rising input costs. Farm revenues in 2022 reached record levels in many regions, even as fertilizer bills climbed. The Persian Gulf, by contrast, is not a significant food exporter. While grain prices have risen, the closure of the Strait is unlikely to inspire a rally of the same magnitude, the economists noted.
“In 2022, the pain of $1,000+ DAP was cushioned by $6–7 corn,” the report said. “In 2026, if the Strait remains closed for two to four months, farmers could face fertilizer prices approaching 2022 peaks, while corn is at $4.00-4.50/bushel and soybean margins are already negative before the crisis began.”
Don’t sleep on sulfur
While the surge in urea prices feels most acute to U.S. producers right now, the report emphasized the indirect risk posed to phosphate fertilizer supply. Sulfuric acid is a key input for producing all phosphate fertilizer, DAP, MAP, TSP and phosphoric acid.
NDSU noted the Gulf produces approximately 44% of the world’s seaborne sulfur, almost entirely as a byproduct of oil and gas refining. The shutdown of the Strait cuts off sulfur feedstock that producers far from the conflict zone need to manufacture their own phosphate products, the report said, noting that sulfur prices had already more than doubled in 2025.
U.S. vulnerable, but not the most exposed
So where do U.S. producers feel the most pain? The report noted that for ammonia and potash, the U.S has virtually no direct Gulf exposure, with domestic production accounting for over 90% of ammonia consumption and Canada and Trinidad filling the import gap. Potash is over 90% imported, with roughly 80% coming from Canada under the U.S. Mexico Canada Agreement and no Gulf dependency.
That’s the good news. It’s a less encouraging story when it comes to urea and phosphate. Around 17% of U.S. urea consumption transits the Hormuz, coming primarily from Qatar, Oman, Saudi Arabia and the United Arab Emirates. Roughly 20% of phosphate (MAP and DAP) comes from the Gulf, with Saudi Arabia providing over half of U.S. ammonium phosphate imports, the report noted.
With Moroccan and Russian phosphate facing countervailing duties of up to 47%, which were imposed in 2021, and Chinese exports suspended, the concentration risk around Saudi supply is acute, the Monitor observed.
“The bottom line: the Strait of Hormuz accounts for a meaningful share of both U.S. urea and phosphate consumption, and the greater risk is price transmission from global markets, where the disruption is far more severe,” the report said.
Still, it could be worse. As shown in the table above, around 54% of India’s total fertilizer imports in 2024 came from the Gulf, while Brazil and Australia have the highest overall dependence on urea, measured as a percentage share, the report found. During the same period, Brazil sourced around 40% of its urea imports from the Gulf, with Australia at around 68%.