Middle East

In fertiliser trade, the Middle East refers to the group of producing and exporting nations around the Persian Gulf and its periphery — chiefly Saudi Arabia, Qatar, the United Arab Emirates, Bahrain and Iran — together with, by extension, the economies of the adjacent Near East and North Africa (the NENA region). This area ranks among the world's foremost strategic hubs for ammonia, urea, sulphur and phosphate fertiliser supply. For nitrogenous fertilisers, competitiveness stems from plentiful low-cost gas reserves, since output is directly energy-driven^[1]. The Strait of Hormuz, the obligatory channel for the bulk of flows, concentrates the sector's geopolitical and logistical risks^[2].

Position in global supply chains

The region holds a central place in international fertiliser and raw material trade. In 2024, it supplied 34% of global urea commerce, 18% of MAP and DAP trade, 23% of ammonia exchanges and 49% of sulphur commerce^[3]. These commodities move predominantly through the Strait of Hormuz, which also serves as a critical corridor for liquefied natural gas (LNG): the affected zone furnishes 20% of world LNG trade, feeding nitrogen producers in South Asia in particular^[3].

The industry's exposure extends beyond physical flows of finished products. Disruptions at the strait also hit downstream producers' economics, as natural gas typically accounts for 60–80% of nitrogen production costs^[3]. A halt in gas deliveries thus generates knock-on effects across world markets, well beyond the immediately affected area^[1].

Evolution of trade flows and shifts

Recent conflicts have profoundly altered shipping routes. Since the war in Ukraine, ammonia flows have undergone marked displacement: the Black Sea lost volumes to the benefit of the Middle East and the Caribbean/Gulf of Mexico zone^[4]. In the ammonia market, Asia's balance swung from a modest shortfall to a sizeable surplus, driven by new units coming on stream in Saudi Arabia and Oman alongside lacklustre industrial demand in the region^[4].

Houthi attacks in the Red Sea subsequently forced ammonia traffic to circumnavigate Africa rather than use the Suez Canal, lengthening voyage distances and propping up price differentials between eastern and western markets^[4]. This dual bottleneck — Hormuz and the Red Sea — now exposes the entire chain, from producers to farmers, to compounded hazards^[1].

Supply risks and disruption scenarios

A prolonged closure of the Strait of Hormuz would simultaneously block finished fertilisers and the inputs required for their manufacture elsewhere. Between late February and late April 2025, only four sulphur vessels were able to exit the Gulf via Hormuz, totalling roughly 200 kt, and two urea vessels also left the area with approximately 85 kt^[5]. India appears especially vulnerable, given its reliance on regional supplies and the curtailment of Chinese exports in recent years^[5]. Morocco, Indonesia and China number among the major sulphur importers affected, whilst Brazil, Australia, the United States and Thailand depend heavily on finished fertilisers transiting this route^[5].

Uncertainty attaches as much to the duration of disruptions as to the speed of normalisation once flows resume, and to the downstream consequences for 2026 and subsequent spreading seasons^[2].