The Iran war is delivering a potential shock to global food production that has received little attention amid the focus on oil prices: a sharp rise in fertilizer costs hitting just as farmers in the Northern Hemisphere prepare to plant.
Natural gas from the Persian Gulf region is the primary feedstock for nitrogen-based fertilizers, and the Persian Gulf accounts for roughly 45% of global urea production. With energy prices surging and regional supply chains disrupted, fertilizer prices are rising, in a pattern that closely mirrors the early weeks of the Russia-Ukraine war in 2022, when a fertilizer price spike contributed to food insecurity across Africa, South Asia, and Latin America.
