The Global Urea Shortage of 2026: Supply, Prices and Who Is Affected

What caused the urea shortage of 2026?

The urea shortage of 2026 is above all a supply shock. Urea is the most widely traded nitrogen fertiliser. It is made from ammonia, which is produced mainly from natural gas, so export capacity clusters where gas is cheap. Argus estimates that the Middle East supplies about 20 million t of urea a year, close to a third of global exports ^[1]. In 2024 Fertimetrics put Iran alone at nearly 10% of global urea exports, which it estimated at about 55 million t ^[15].

The 2026 Iran war largely closed the Strait of Hormuz to Gulf fertiliser cargoes. More than 800,000 t of urea was left stranded in the Gulf, and plant outages, particularly in Iran, reduced supply further in March ^[1]. The World Bank reported that Iran halted ammonia production and that Qatar suspended urea, ammonia and sulphur output after its facilities were damaged ^[3]. The gas side of the shock, including the loss of Qatari LNG, is covered in our earlier analysis of LNG, gas prices and urea.

The disruption has lasted. In mid-September the International Food Policy Research Institute (IFPRI) reported that fertiliser shipments out of the Gulf remained largely halted more than six months on. A ceasefire allowed some shipping between mid-June and mid-July, but transits fell back to near zero after fighting resumed ^[2]. Global nitrogen exports fell 9% in the first half of 2026, with steep falls from Saudi Arabia, Qatar and the UAE ^[2].

Who exports urea outside the Gulf?

Other exporters have filled part of the gap, but not all of it.

• China. Chinese nitrogen exports reached 2.8 million t (nitrogen basis) in the first half, up about 47%, with shipments to India up more than 200% ^[2]. Exports resumed from late May under government quotas ^[6,9]. In July Argus forecast Chinese urea exports of 6.5 million t in 2026, against 4.6 million t in 2025 ^[6]. By early October a fourth round of export quotas covered more than 1.5 million t ^[9].
• United States. US nitrogen exports rose almost 60% to 1.2 million t in the first half, and urea exports almost tripled, with more than half of the increase going to Canada ^[2].
• Russia. Russian nitrogen exports fell 11% in the first half, and its urea and ammonia exports are subject to export quotas ^[2].
• North and West Africa. Algeria and Nigeria are important suppliers to Brazil, although Brazil's combined arrivals from the two fell 42% to nearly 840,000 t in January–August ^[10]. Algerian granular urea sold in the $540s/t fob in late September ^[8], and Egypt was among the origins India turned to ^[2].

Some non-Gulf capacity has also been lost. On 5 October Nutrien announced the indefinite shutdown of its four ammonia plants and one urea unit in Trinidad, citing gas constraints. The plants produced 1.27 million t of ammonia in 2024 ^[14].

How high did urea prices go in 2026?

Prices rose fast in the spring. Argus assessed urea at nearly $780/t fob by mid-April ^[1]. In April, India's Indian Potash Ltd (IPL) bought a record 2.5 million t at $935/t CFR for the west coast and $959/t CFR for the east coast. The previous Indian tender had drawn bids of $508–512/t ^[5]. The World Bank's urea series averaged $693.5/t in the second quarter, against $537.7/t in the first quarter and $422.7/t across 2025 ^[4].

The fall was almost as steep. Argus analyst Owen Gooch estimated that 3.7 million t of urea demand was lost or deferred in April–June, 27% less than a year earlier ^[6]. By mid-July about 905,000 t of urea stored in the Middle East had shipped through Hormuz and the Red Sea ^[6], and expectations of Chinese exports pushed prices to around $330/t fob ^[1]. IFPRI found that urea had returned to its January level by the end of August ^[2]. The World Bank series averaged $399.2/t in the third quarter and $407.5/t in September ^[4].

A modest rebound followed. On 25 September, Middle East granular urea was assessed at about $465/t fob and Brazil granular at about $485/t CFR ^[7]. Profercy reported deals at $500/t CFR in Brazil and Chinese granular at $450–455/t fob ^[8]. Excluding the conflict-driven spike, Profercy said, $500/t CFR had not been exceeded since December 2022 ^[10]. In early October the rally stalled on slower Brazilian buying and a moderate increase in urea moving through Hormuz ^[9].

In the United States, New Orleans (NOLA) vessel business was done at $500/t CFR, while barge values slipped into the $430s per short ton ^[9]. Farm-gate prices remain high: DTN's retail survey put urea at $674/ton in mid-October, up 13% year on year, and anhydrous ammonia at $987/ton, up 18% ^[11].

Which importing countries are most exposed?

Exposure depends on how much a country imports and how much of that came from the Gulf.

• India. India imported about 10 million t of urea in 2025 ^[5]. Its nitrogen imports rose by more than 1.1 million t (52%) in the first half, because lower LNG supply also cut domestic output. Buyers replaced Gulf product with cargoes from China, Egypt, Viet Nam and Russia ^[2,3]. Urea imports reached about 4.75 million t in April–August, and the landed cost fell from about $947/t in May to about $406/t by mid-September ^[7].
• Brazil. Brazil imports about 95% of its nitrogen, and almost all of its urea ^[12]. It took 7.73 million t of urea in 2025, and Profercy calculates that it would need more than 4 million t in the fourth quarter of 2026 to match that ^[10]. Nitrogen imports fell 19% in the first half ^[2]. Buyers turned to ammonium sulphate, whose January–July imports of nearly 2.9 million t were a quarter higher than urea intake ^[10].
• Australia. Urea dominates Australia's fertiliser imports, which normally rely heavily on Gulf-linked supply chains ^[16]. After shortages in the second quarter, supply stabilised with more cargoes from Southeast Asia and Nigeria ^[1].
• United States. Domestic industry meets nearly 60% of US nitrogen, phosphate and potash demand, and nitrogen import reliance was 13% in 2025 ^[12]. However, about 37% of US urea imports in the 2023/24 fiscal year passed through Hormuz, according to US Census data cited by Fertimetrics ^[15]. Yara reports that US urea imports for the 2026/27 season are tracking well below prior years ^[13].
• European Union. EU nitrogen imports fell by 1.6 million t, or 51%, in the first half ^[2]. Yara reports a 30% fall over May–September, to 1.1 million t. Dutch TTF gas averaged $18.1/MMBtu in the third quarter, against $11.5/MMBtu a year earlier, which also raised costs for European producers ^[13].

How have governments responded?

Policy responses have aimed at securing supply and limiting the cost to farmers.

• India has bought through large tenders. IPL's latest tender sought 1.7 million t for shipment by 15 December, with offers due on 7 October ^[7]. IFPRI notes that the fertiliser subsidy bill may exceed ₹3 trillion (about $31 billion), against ₹1.71 trillion budgeted ^[2].
• China has managed exports through successive quota rounds rather than reopening fully ^[6,9].
• The European Commission set up a temporary state aid framework in April. It allows member states to cover up to 70% of farmers' additional fuel and fertiliser costs since late February ^[2].
• Australia's export credit agency, Export Finance Australia, is underwriting 340,000 t of additional urea for CSBP, Incitec Pivot and Summit ^[1].

What to watch

Supply from the Gulf remains the main variable. Profercy notes that Hormuz flows improved in September but are still "only a fraction of what was possible" before the conflict ^[10]. There is also "still no firm clarity" on further Chinese export quotas ^[10]. Argus expected new supply from Nigeria and Russia to reach export markets in November–December ^[6]. IFPRI warns that northern-hemisphere autumn buying, Asian rice and Brazil's second-crop maize could push nitrogen prices up again if the strait stays closed ^[2]. For importers, the result of India's October tender, Brazil's fourth-quarter buying and European gas prices will show whether 2026 ends with a renewed squeeze or a slow return to balance.

Alupetra follows urea supply and pricing from its offices in Istanbul, London and Dubai.