How the 2026 Iran War Disrupted Fertiliser Trade: Urea and Ammonia

How much nitrogen fertiliser does the Gulf export?

The Gulf is one of the world's main sources of nitrogen fertiliser, so the 2026 Iran war quickly became a fertiliser shock. Argus estimates that the Middle East ships about 20 million t of urea a year, roughly 35% of global seaborne trade. Just over 17 million t/yr of that is loaded behind the Strait of Hormuz or comes from Iran ^[1]. The International Energy Agency (IEA) says more than 30% of global urea trade moves through the strait, along with about 20% of ammonia and phosphate trade ^[2]. Research from North Dakota State University, cited by Fertilizer Daily, puts the Gulf at about 43% of seaborne urea exports and more than a quarter of global ammonia exports ^[3]. The estimates differ mainly in whether they include Iran.

Supply comes from a small number of large producers. Qatar has about 6 million t/yr of urea capacity, the largest in the Gulf Cooperation Council (GCC) ^[4], and its QAFCO site is described as the world's largest single-site urea exporter ^[5]. SABIC Agri-Nutrients and Ma'aden produce in Saudi Arabia, and Fertiglobe in the UAE ^[9,10,11]. Oman's Omifco produced 2.07 million t of urea and 1.35 million t of ammonia in 2025. Argus ranks it the joint third-largest urea producer in the Gulf, excluding Iran, behind QatarEnergy and SABIC ^[1]. The International Trade Centre (ITC) tracks seven economies that depend on Hormuz for their exports: Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the UAE ^[6,3].

Buyers are concentrated too. According to a World Trade Organization (WTO) analysis, India sources nearly two-thirds of its nitrogen fertiliser imports from the Gulf, and Thailand relies on the Middle Eastern route for about half of its nitrogen supply ^[7]. Between 2023 and 2025, 71% of Omifco's urea deliveries went to India ^[1].

Why do gas and Hormuz make Gulf supply fragile?

Two dependencies explain the exposure. The first is gas. In Qatar, urea production stopped along with gas output. When QatarEnergy halted LNG production in early March, it also stopped producing urea, polymers, methanol and aluminium, and declared force majeure to affected buyers ^[4]. QAFCO went offline on 4 March, after gas output was shut down following strikes on the Ras Laffan and Mesaieed facilities ^[5]. The World Bank reported that Iran also halted ammonia production ^[8]. The gas side of the shock is covered in our earlier analysis of LNG, gas prices and urea.

The second is geography. Qatar has no alternative export route, so all of its shipments must pass through Hormuz ^[5]. Ma'aden's Ras Al-Khair complex sits on Saudi Arabia's Gulf coast ^[9], and both Saudi and Emirati producers have had to find other routes ^[10,11]. Oman is the exception. Omifco exports from the Omani port of Sur, and Argus reported that Omani suppliers largely kept operating and shipping, avoiding the congestion elsewhere in the region ^[1].

What happened to Gulf output and exports in 2026?

Exports fell within weeks. ITC data, released with the WTO and UNCTAD, show that urea exports from the seven Hormuz-dependent economies fell 83% in April from a year earlier, and ammonia exports 75% ^[6,3]. Over the first half of 2026, nitrogen exports fell 63% from Saudi Arabia, 37% from Qatar and 29% from the UAE ^[12].

There has been no lasting recovery. A ceasefire allowed some shipping between mid-June and mid-July, but fertilisers were a negligible share of that traffic, and transits fell back to near zero after fighting resumed in mid-July ^[12]. Profercy reported that movements through Hormuz improved in September compared with August, but remained "only a fraction of what was possible prior to the start of the conflict" ^[13].

Producers have responded in different ways:

• Fertiglobe avoided disruption-related shutdowns in the second quarter by expanding storage, and exported the equivalent of 56% of its UAE production. Revenue rose 92% to $1.1 billion, as higher prices partly offset lower volumes and extra logistics costs ^[11].
• SABIC Agri-Nutrients reported third-quarter net income of SAR 484 million, 62% lower than a year earlier. It cited supply-chain disruption and higher shipping costs ^[10].
• Ma'aden trimmed its 2026 phosphate production guidance to 6–6.5 million t of DAP equivalent, citing a lack of sulphur and high logistics costs ^[9]. It also withdrew its ammonia guidance ^[12].

How did shipping, freight and insurance costs change?

Traffic through the strait collapsed. An average of 178 ships a day transited Hormuz before the conflict, and transits fell by about 95% once hostilities began, according to reporting cited by the broker Marsh ^[14]. War-risk insurance premiums rose from about 0.15–0.25% of hull value to between 3% and 10% at the peak, according to Marcus Baker, Marsh's global head of marine. Premiums softened after the June ceasefire and rose again after three vessels were attacked in the first week of July ^[14].

Rerouted cargoes cost more to move. Argus estimated freight at about $40/t for a 60,000 t DAP cargo from Saudi Red Sea ports to India, against the $20s/t from Duqm in Oman. War-risk premiums still apply in the region, and congestion at Omani ports has reportedly pushed up demurrage ^[9]. Threats to Saudi shipping in late July also raised risks around the Bab el-Mandeb strait ^[9]. In the UAE, Fertiglobe's overland route to ports outside Hormuz involved "double handling" and higher transport costs ^[11].

Which rerouting options and alternative suppliers emerged?

Gulf producers have moved product overland to ports outside the strait:

• Saudi Arabia. SABIC Agri-Nutrients redirected exports through the Red Sea ports of Yanbu, Neom, Rabigh and Jeddah, and added an east-to-west transport line with more than 25 carriers ^[10]. In the second quarter it made its first shipment of bagged and solid bulk urea from the west coast ^[15]. Ma'aden has trucked product from Ras Al-Khair, mostly to Yanbu, and in August arranged to load DAP at Duqm in Oman, including a 60,000 t cargo for India ^[9].
• UAE. Fertiglobe has trucked cargoes to ports outside Hormuz and is in early talks with Etihad Rail on adding rail. Its Egyptian plants export through the Mediterranean, and its Algerian shipments have been unaffected ^[11].
• Oman. Omani suppliers have largely kept shipping ^[1], and Duqm now also handles Saudi cargoes ^[9].

These routes have limits. In May a CRU analyst put the likely upper limit for Ma'aden's Red Sea exports at perhaps three or four cargoes, or about 150,000–200,000 t ^[16]. Uncertainty over Saudi Red Sea exports has also widened price spreads between markets east and west of Suez ^[11].

Other exporters have filled part of the gap. ITC found that suppliers outside the Gulf increased shipments for 10 of the 12 products it tracked. The extra volumes fully offset the shortfall only for ammonia and polypropylene, not for urea ^[6,3]. US anhydrous ammonia exports rose by more than 56% in the first half, mostly to Morocco, Norway, Chile and Mexico. Ammonia prices peaked in May and have since largely recovered ^[12].

How did the disruption spread to sulphur and phosphates?

Sulphur has become a major bottleneck. The IEA estimates that around half of global seaborne sulphur trade moves through Hormuz. Sulphuric acid made from it is used to produce phosphate fertilisers ^[2]. The International Food Policy Research Institute (IFPRI) found that global elemental sulphur exports fell 33% in the first half of 2026, from 13.5 million t to 9 million t. The Gulf accounted for almost three-quarters of the decline ^[12]. Sulphur prices more than doubled after 1 January, and MAP and DAP prices rose 25–30% after the strait closed ^[12].

Phosphate supply has been hit directly as well. The Gulf, mainly Saudi Arabia, accounts for about 20% of global phosphate exports, and Saudi phosphate exports fell 22% in the first half ^[12]. Ma'aden shipped about 500,000 t of phosphate fertiliser a month in 2025, before the conflict cut volumes sharply ^[16]. Other exporters have restricted supply: Russia extended its sulphur export ban to the end of 2026, and China suspended sulphuric acid exports in May ^[12]. Mosaic idled phosphate production at two Louisiana plants in late August, and Brazil's fertiliser industry has requested up to R$2 billion in support for sulphur imports ^[12].

What to watch

The main variable is traffic through Hormuz, measured by transits and war-risk premiums. Other indicators are:

• Qatar. When QAFCO's urea output resumes; the halt announced in March gave no restart date ^[4,5].
• Overland and Red Sea capacity. Volumes moving through Saudi Red Sea ports and Omani ports, and security around Bab el-Mandeb ^[9,10].
• Sulphur. Whether Gulf and Central Asian sulphur supply recovers enough to lift phosphate output ^[12].
• Ammonia. Red Sea insecurity is a particular risk for ammonia shipments to Europe ^[11].

Until Gulf exports resume at scale, buyers will continue to rely on longer routes, other suppliers and higher costs.

Alupetra follows Gulf fertiliser flows and shipping conditions from its offices in Istanbul, London and Dubai.