Why the War in Iran Could Hit Farmers Harder Than 2022
Today, the world’s attention has shifted from Russia’s war against Ukraine to the conflict in Iran. As a grower who has been operating in wartime conditions for more than 10 years, I can say that in the shadow of these events in the Middle East, a crisis is unfolding that could severely affect the entire agricultural sector and, consequently, consumers worldwide.
First, Iran is one of the global leaders in the production and export of nitrogen fertilizers.
At the same time, a significant share of global nitrogen fertilizer exports from the Persian Gulf countries passes through the Strait of Hormuz. Iran, Qatar, Saudi Arabia, and the UAE together account for roughly 30–50% of global seaborne trade in urea and ammonia. At the moment, the Strait of Hormuz is effectively blocked.
Many companies, including Qatar’s QatarEnergy, have suspended the production or export of nitrogen fertilizers. This has already caused shortages and rising prices within the first days of the war in the Middle East. Nitrogen fertilizers are produced primarily from natural gas, which accounts for more than 70% of their production cost for most manufacturers, except Chinese ones.
Due to the blockade of the strait, gas supplies from this region to Europe and Asia have sharply declined, and prices have increased by 50–80% in just a few days. As a result, nitrogen fertilizer producers around the world — except those in the United States, Canada, and, unfortunately, Russia — have faced a massive increase in production costs and have immediately raised prices for this group of fertilizers.
For example, below is the price dynamics of April natural gas futures in the Netherlands over the past three months.
Is there any way to stabilize the situation?
I believe that major American and Canadian companies (for example, CF Industries and others) will not be able to increase nitrogen fertilizer production by the 30–40 million tons that could be missing due to the war in the Middle East and the crisis it has triggered.
Shares of CF Industries have already risen significantly since early March 2026. This in itself signals not only expectations of future shortages and high prices but also the market’s immediate reaction and the critical nature of the current situation.
Another problem awaiting farmers concerns phosphate fertilizers. Morocco controls about 70% of the world’s phosphate rock reserves and is the largest exporter of phosphate fertilizers (DAP/MAP). To produce phosphoric acid, Morocco imports huge volumes of sulfur, and most of this sulfur is supplied through the Persian Gulf.
The blockade of this maritime route is already affecting sulfur supplies: prices had begun to rise even before the escalation and could now easily double or even triple. As a result, production in Morocco could face significant cuts or even a complete shutdown. As for other exporters of phosphate fertilizers, Russia is currently under sanctions, while the United States and Canada will not be able to compensate for the large market deficit quickly enough. A shortage and rising prices for this group of fertilizers are therefore almost inevitable.
The situation with potash fertilizers may be somewhat more stable, provided Iran does not disable Israel’s Port of Ashdod — the key gateway for exporting Israeli-produced potash fertilizers to global markets, particularly to Europe, the Americas, and Brazil.
A Repeat of 2022?
The conflict with Iran is undermining the global economy from the outset. If it becomes prolonged, it could turn into a slow-burning bomb with enormous destructive potential.
Ukraine, Brazil, India, and EU countries are among the nations most dependent on imports of fertilizers and fuel. Prolonged disruptions in supplies from the Middle East will undoubtedly make it impossible to meet the demand of key consumers and will sharply increase costs in the agricultural sector, where these inputs form the foundation of production expenses.
A parallel can be drawn with 2022, when Russia’s full-scale invasion of Ukraine triggered a significant surge in global prices for agricultural commodities and, consequently, food. However, four years ago, despite the sharp increase in energy and fertilizer prices, trade flows eventually adjusted, and the situation stabilized.
This time, the physical blockage of a critical maritime route — the Strait of Hormuz — combined with the shutdown of major fertilizer producers, creates an extremely tight bottleneck. No alternative routes can quickly replace the transport corridor that carries 20–22% of the world’s gas and a third of the nitrogen fertilizers exported from the Middle East. If this war with Iran does not end within three to four weeks, the current crisis could prove more destructive for the agricultural sector than the war in Ukraine.
What Can Growers Do in Such Circumstances?
First and foremost, reduce fertilizer application rates. This will lead to lower yields for nitrogen-dependent crops (corn, wheat, rapeseed) and reduced profitability. In such a scenario, the number of agricultural producers could decline, while food prices in 2026–2027 may rise significantly.
Companies that managed to purchase the necessary inputs in advance — before the start of the season — are currently in a much stronger position. This is exactly the strategy we follow, relying on analytics and market trends.
This year, that approach has proven extremely successful. It contrasts with another strategy — holding back crop sales in anticipation of potential price increases in spring and only then purchasing fertilizers, crop protection products, and fuel.
I hope this military conflict will not be prolonged and will have only a minimal impact on farmers. We will see how events unfold in the near future.
Dmytro Skorniakov, CEO of HarvEast
