Middle East Crisis Could Affect What You Eat

Tensions in the Middle East are not just about geopolitics—they could soon affect something much closer to home: the price of food on your table. The Strait of Hormuz, located off Iran’s southern coast, carries a massive share of global trade, including fertilizers and the key raw materials used to produce them. Disruptions here are now raising serious concerns about global food security.

A potential closure of the Strait of Hormuz is creating panic in global fertilizer markets and energy supply chains. Experts warn that if disruptions continue for more than two weeks, the consequences could be worse than the price shocks seen in 2022 after the Russian invasion of Ukraine.

The Persian Gulf region contains some of the world’s largest fertiliser production facilities. In fact, between one-quarter and one-third of the global trade in fertiliser raw materials passes through the Strait of Hormuz. Iran itself is a significant contributor, ranking as the fourth-largest exporter of urea, the most widely used nitrogen fertilizer in the world. The Middle East also dominates the supply of sulfur, with around 45% of global sulfur trade coming from this region—another critical raw material in fertilizer production.

The market had already started reacting. Reports indicate that prices of chemicals have surged dramatically: urea prices have risen 27%, ammonia by 16%, phosphate by 6%, and sulfur by 7%. Buyers are already stepping back from the market due to uncertainty.

This matters because fertilizer is not optional for modern agriculture. Around half of global food production depends on synthetic nitrogen fertilizers. Without them, crop yields would fall significantly, leading to higher prices for everyday food items. Even animal feed would become more expensive, pushing up the cost of meat and dairy products. And the timing couldn’t be worse: this is the spring planting season across Europe, the UK, and North America, when farmers need fertilizers the most.

Fertilizer production also depends heavily on energy. In fact, natural gas accounts for between 60% and 80% of the production cost of nitrogen fertilisers. When energy prices rise, fertilizer production becomes far more expensive. Many countries are particularly vulnerable: India relies heavily on LNG imports from the Persian Gulf to operate its domestic urea plants, while Brazil depends heavily on imported nitrogen and phosphate fertilizers.

Overall, when fertilizer becomes less available or too expensive, farmers apply less to their crops, which almost always leads to lower yields and higher food prices.

The ripple effects of geopolitical conflict can travel far beyond the battlefield. From fertilizer shortages to rising energy costs, disruptions in the Strait of Hormuz could ultimately affect the price of the food we eat every day. Unless governments step in to support farmers during this challenging period, the burden could fall heavily on those who produce the world’s food—and eventually on consumers everywhere.