Impact of Strait of Hormuz Closure: Global Fertiliser Supply Could Be Disrupted

Jakarta — Geopolitical tensions in the Middle East have once again focused global attention on the Strait of Hormuz, a narrow shipping lane connecting the Persian Gulf with the Indian Ocean.

The Strait has long been recognised as one of the world’s most important energy corridors, but its role extends beyond oil and gas trade alone. The route is also vital for global fertiliser commerce.

Several analysts have warned that disruptions at the Strait of Hormuz could trigger a surge in fertiliser prices, hamper the supply of agricultural raw materials, and increase food production costs across various countries.

The Strait of Hormuz is one of the most strategically important narrow points in global trade. Beyond serving as a primary export route for oil and gas from Gulf nations, the region also plays a significant role in fertiliser trade, particularly nitrogen-based fertilisers such as urea.

“Should the Strait of Hormuz be closed, the impact on the fertiliser complex could be severe. The nitrogen complex, and urea in particular, would bear the heaviest burden, given this region’s importance to global exports,” according to analysis by Rabobank.

The Middle East represents one of the world’s largest centres for nitrogen-based fertiliser production. Countries such as Qatar, Iran, Saudi Arabia, the United Arab Emirates, and Bahrain possess substantial production capacity and export their products to various global markets.

The region’s significant role has led the Strait of Hormuz to be frequently referred to as the “nutrient highway” or primary route for global agricultural nutrition trade.

Disruptions at the Strait of Hormuz have the potential not only to impede fertiliser distribution but also to trigger significant price increases. Rabobank has modelled several scenarios should the route face disruption. Under a full closure scenario, urea prices in several major importing nations could spike sharply within a short timeframe.