Gas, fertilizer, diesel: The looming triple shock for global food supplies

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Published on: April 26, 2026 / Updated on: April 26, 2026 – Author: Konrad Wolfenstein

Farmers in South Asia and East Africa are deciding in these weeks whether to use fertilizer or not for the 2027 harvest – and the rest of the world is watching the oil price

Farmers in South Asia and East Africa are deciding in these weeks whether to use fertilizer or not for the 2027 harvest – while the rest of the world watches the oil price – Image: Xpert.Digital

The overlooked danger: Why the lack of fertilizer from the Middle East could lead to world hunger in 2027

When the oil war wipes out the fields – why the 2027 harvest could already be lost

While the world stares intently at blocked tankers, soaring barrel prices, and the threat of a global energy shortage, a far more existential crisis is brewing in the shadow of the Middle East conflict. The de facto closure of the Strait of Hormuz not only severs the lifelines of oil supplies but also strikes global food production at its most vulnerable and least noticed point: the supply of fertilizers. What was initially dismissed on the financial markets as a logistical and energy policy warning signal is, upon closer inspection, revealing itself to be a creeping attack on global food security. Since today's fertilization determines tomorrow's harvest in agriculture, an invisible time bomb is ticking. If farmers in South Asia, East Africa, and the Middle East now lack the necessary resources, even yesterday's overflowing grain silos will be of no use. The in-depth analysis shows that the true core of this crisis is not measured in gallons of oil, but in tons of urea – and the fatal effects will hit the world with full force in 2027.

The silent agricultural earthquake: The overlooked core of the conflict – not oil, but fertilizer

The public perception of the Iran war is a crisis narrative centered on oil. Tankers, commodity markets, barrel prices – these are the headlines dominating the front pages. But the far more dangerous, because structurally deeper, dimension of this crisis is unfolding in the fields of South Asia, East Africa, and the Middle East. It is quieter, slower – and has far greater consequences for billions of people.

Since February 28, 2026, the start of the US-Israeli operation "Epic Fury" against Iran, the Strait of Hormuz has been effectively closed to commercial shipping. Shipping traffic through the strait plummeted by more than 90 percent within just a few weeks. What was initially interpreted as an energy policy warning signal, upon closer analysis reveals itself to be what it truly is: an attack on the global food production chain at its most vulnerable link – agricultural inputs.

Around 30 percent of the world's traded fertilizer, equivalent to approximately 16 million tons annually, passes through the Strait of Hormuz. This isn't just about finished products: the narrow strait between Iran and Oman is also the most important export route for urea, ammonia, diammonium phosphate, and sulfur – all essential inputs for global food production. For some countries, the dependence is even more dramatic: roughly 67 percent of the world's urea shipped via this route is available nowhere else as quickly.

A chain reaction: When gas, fertilizer and diesel fail simultaneously

What fundamentally distinguishes this crisis from previous commodity shocks is the simultaneous triple impact on energy, fertilizer and fuel – the three central operating costs of modern agriculture.

The price of urea, the world's most widely used nitrogen fertilizer, has risen by around 50 percent since the start of the war, to over $700 per ton. Egyptian urea, a key benchmark for nitrogen fertilizer prices, cost between $400 and $490 per ton before the war—and now stands at around $700. Ammonia has become about 20 percent more expensive, while crude oil and diesel prices have seen similarly steep increases. In the US, the national average diesel price rose by around 20 cents per gallon within 48 hours during the first days of the war, while in Britain the price of red agricultural diesel nearly doubled—from 66.5 pence to 115 pence.

The crucial systemic connection lies within the production chain itself: nitrogen fertilizer is produced from natural gas. Natural gas – primarily from Qatar – is the primary raw material for ammonia and urea production in South Asia. When Qatar temporarily halted LNG production on March 2, 2026, following Iranian attacks on the Ras Laffan plant, it not only exposed an energy problem but also directly impacted fertilizer production in India, Pakistan, and Bangladesh. Qatar supplies 44 percent of India's LNG imports, on which a significant portion of the domestic fertilizer industry depends. Indian fertilizer producers such as IFFCO, Chambal Fertilisers, and GNFC reduced or halted parts of their production.

The FAO's chief economist succinctly summarized the dilemma: farmers are facing a double cost shock – more expensive fertilizers and rising fuel costs, affecting the entire agricultural value chain, from irrigation to transport. Because fertilizer application and yield increase are not linearly related, even moderate reductions in fertilizer use lead to disproportionately large yield declines – especially in regions where initial application rates are already low.

The difference compared to 2022: No fast substitutes

Comparisons to the shock of the 2022 Ukraine war are obvious, but fall short in several key aspects. While Russia's invasion of Ukraine in February 2022 did disrupt massive grain and fertilizer exports, the international community found alternative supply routes within a few months: via the Grain Corridor agreement, through Romanian ports, and via Black Sea ports. Fertilizer shipments from Russia and Belarus were sanctioned but partially rerouted. Although prices reached record highs—ammonia cost as much as US$1,600 per ton at times in 2022—they subsequently fell.

The Hormuz shock of 2026 is structurally different. There are no strategic fertilizer reserves like those for oil. FAO Chief Economist Máximo Torero put it succinctly: The loss of Gulf exports creates an immediate global bottleneck for which there are no quick substitutes. Around 3 to 4 million tons of fertilizer per month were unable to reach the markets due to the Hormuz blockade. At the same time, alternative production capacity is limited worldwide: European producers are struggling with high gas prices and EU ETS costs, and many plants have been throttled back or shut down in recent years. China's export restrictions on fertilizers remain in place, as Beijing prioritizes its own food security.

Another structural difference lies in the simultaneity of the shocks. In 2022, energy became expensive, but fertilizers from the Gulf region continued to flow. In 2026, energy, fertilizers, and shipping were disrupted simultaneously – exacerbated by the shutdown of Qatar's Ras Laffan, the world's largest LNG and fertilizer complex. The 14 production tanks at Ras Laffan, with a capacity of approximately 77 million tons of LNG annually, alone accounted for around 20 percent of the global LNG supply. Their partial shutdown meant immediate competition for alternative LNG sources for Asia and Europe – with direct repercussions for gas prices, fertilizer production, and electricity costs.

War risk insurance for tankers increased tenfold within just a few days: Before the conflict, a tanker worth US$120 million had paid around US$48,000 in coverage premiums for a Gulf passage; after the outbreak of war, this figure rose to as much as US$1.2 million for a single seven-day transit. Even after the ceasefire on April 8, 2026, insurance premiums remained at a level that made commercial shipping unprofitable for many providers. Marine insurers assess risks based on current realities, not on diplomatic declarations of intent.

The Geography of Hunger: Which Countries Are Most Affected

The global map of affected countries is unevenly distributed – and follows a harsh economic logic. Countries that rely heavily on the Strait of Hormuz for fertilizer imports and simultaneously have low foreign exchange reserves to cushion price shocks are the most vulnerable.

Sudan obtains approximately 54 percent of its fertilizer imports via the Hormuz Corridor, Sri Lanka 36 percent, and Kenya around 26 percent. The FAO identifies the following countries as particularly vulnerable: Bangladesh (critical Boro rice harvest), India (Kharif season before the monsoon), Egypt (highly dependent on wheat imports), and in sub-Saharan Africa, Somalia, Kenya, Tanzania, and Mozambique. For the populations of the Gulf States themselves – Qatar, UAE, Kuwait, Bahrain, Oman, and Saudi Arabia – the problem is reversed: as massive food importers, they are directly threatened by supply shortages due to the decline in shipping.

Global society is even more closely intertwined through remittances than pure trade data suggests: Millions of migrant workers from South Asia and East Africa, employed in the Gulf States, send a considerable portion of their income back to their home countries. If the Gulf States' economies are weakened by the conflict, these households in Pakistan, Bangladesh, Ethiopia, or the Philippines will be the first to be affected.

The United Nations estimated that if the conflict continues until June 2026, an additional 45 million people could be driven into acute food insecurity – and the global total could rise to over 363 million, reaching levels seen at the start of the war in Ukraine. The World Food Programme (WFP) has already warned that the crisis could represent the worst disruption to humanitarian aid operations since COVID-19. The WFP's own operating costs have increased by 15 to 20 percent due to higher freight costs and longer detours.

India: Buffer, price pressure and the Kharif bet

India deserves special attention because the country is deeply integrated into the global fertilizer market as both an importer and a producer. Around 30 percent of India's DAP (diammonium phosphate) imports come from the Gulf region. For LNG, which is needed as a feedstock for domestic nitrogen fertilizer production, India is 44 percent dependent on Qatar.

Following the shock, the Indian government reacted swiftly: The Ministry of Agriculture reassured markets by stating that opening stocks for the 2026 Kharif season amounted to approximately 180 lah tonnes (18 million tons), compared to a seasonal demand of 390.5 lah tonnes – a coverage rate of 46 percent compared to the usual benchmark of 30 percent. India is diversifying its sources of supply, turning to Morocco, Australia, Malaysia, Jordan, Canada, Algeria, Egypt, and Togo. Nevertheless, at the start of the crisis, India's monthly urea production was only 1.8 million tonnes, below the normal level of 2.4 million tonnes, as several plants were only just restarting after annual maintenance.

The crucial question is not the immediate supply for the 2026 Kharif season, but rather the Rabi season, which begins in October and November. If the global fertilizer market has not stabilized by then, supply shortages and price spikes are likely, putting even subsidized distribution channels under pressure. India's government continues to subsidize urea and DAP – which, while protecting social stability, entails enormous fiscal burdens.

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Buffer paradox: Record reserves – but looming crop failures due to lack of fertilizer

The sulfur cascade: An overlooked multiplier

A largely overlooked dimension of the Hormuz shock is the so-called sulfur cascade. Sulfur is an essential raw material for phosphate fertilizer production – and is exported in enormous quantities from the Gulf region: China imports around four million tons of sulfur annually from the Gulf, while Morocco's OCP Group, the world's largest phosphate exporter, imports around 3.7 million tons.

The Hormuz blockade is not only halting finished fertilizers, but also the sulfur supplies that producers elsewhere need for phosphate processing. This has a cascading effect: Morocco, positioned as the most important alternative phosphate supplier, relies on sulfur and ammonia from the Gulf region for its own fertilizer production – raw materials that are also blocked. The irony of the crisis: Morocco is supposed to fill the gap, but can only do so partially because its own production chain is disrupted by the same blockade.

Strategic supply alternatives: opportunities, limitations, realities

The discussion about alternative supply corridors is in full swing – and reflects a political and economic reality that has been accelerated by the crisis.

The US actively sought dialogue with Morocco to reduce its dependence on Gulf imports. In 2024, the US imported approximately $2 billion worth of fertilizer from the Middle East – roughly 22 percent of its total imports. Morocco exported approximately $6.68 billion worth of fertilizer in 2024, of which 78.8 percent were compound fertilizers. Expanding Moroccan deliveries is technically feasible but limited by difficulties in sulfur supply.

Russia quickly positioned itself as a beneficiary of the situation. As the world's largest potash exporter and one of the largest producers of nitrogen fertilizers, Russia sees the Hormuz crisis as a market opportunity. The Russian company Uralkali had already announced in the third quarter of 2025 its intention to increase its potash exports by 400,000 tons. However, EU sanctions and rising tariffs stand in the way of this option: The EU introduced tariffs of €40 to €45 per ton on Russian and Belarusian fertilizers starting in July 2025, with a planned escalation to up to €430 per ton by 2028.

Belarus, another major potash producer, remains cut off from the European market by EU sanctions – even though the US lifted its own sanctions on Belarusian potash in December 2025. The logistical route for Belarusian potash runs through Russian ports, which are themselves suffering from capacity constraints. Demand on alternative supply routes via EU producers and CIS countries is rising rapidly – but expanding physical supply is a lengthy process that will take months, if not years.

The buffer paradox: record supplies, limited time

At first glance, the global situation appears less dramatic: Global grain stocks are at or near record levels. The FAO projected global grain stocks of 951.5 million tons at the end of the 2025/26 season, around 9.2 percent higher than the previous year. The US Department of Agriculture (USDA) estimated global grain production for 2025/26 at nearly 2,984 million tons, about 4.6 percent higher than the previous year.

These stocks are real, significant – and temporary. The crucial mechanism is this: fertilizers are not used for the current harvest, but for the next one. Farmers who cannot buy or apply fertilizers today – in spring 2026 – will thus be responsible for the crop failures of autumn 2026 and spring 2027. Current grain stocks reflect past, favorable production conditions. They are not a solution to the production gap that is currently emerging.

The FAO office calculates with a time buffer of a maximum of one season. If the disruption lasts longer than three months, the risk profile shifts fundamentally: This leads to adjustments in acreage decisions, yield losses in nitrogen-intensive crops such as wheat, rice, and maize, a switch to nitrogen-fixing crops such as soybeans, and increased competition between food and biofuel production with rising oil prices.

A study by the National Corn Growers Association of the USA shows that while many farmers can still meet their fertilizer needs for the 2026 season, price concerns and supply worries are escalating sharply for 2027. Due to increased nitrogen fertilizer prices, US corn cultivation already costs an estimated $166 per acre more – a cost pressure that is shifting acreage from corn to soybeans: to around 93 million acres in 2026 compared to almost 99 million acres in 2025.

What the markets are already pricing in

Financial markets have taken note of the signals. Fertilizer stocks suffered sharp declines following the Qatar LNG announcement, as producers with gas-dependent supply chains are under immediate margin pressure. At the same time, North American nitrogen fertilizer producers like CF Industries, which base their production on cheaper US natural gas and benefit from higher global market prices, are profiting.

On the export side, a familiar logic prevailed: countries and companies that secured alternative contracts early on were able to lock in quantities and conditions that were later unavailable. India issued a global tender for 1.3 million tons of urea – at the same time as dozens of other countries were also pushing for alternative markets. The result: the alternative routes are not closed, but they are under rapid demand pressure. Buyers who act now are securing supplies for the fall – all others risk shortages.

Freight costs for WFP deliveries rose by 15 to 20 percent, combined with significant delays due to route changes. This doubly impacts humanitarian operations: higher costs coupled with shrinking budgets, as donor countries shift funds toward defense spending.

Systemic lessons: Fertilizer as a strategic asset

The crisis exposes a fundamental gap in global crisis management. There are strategic oil reserves, emergency grain programs, humanitarian food buffers – but no strategic fertilizer reserves. This blind spot in the international security architecture was already visible during the Ukraine war, but no consequences were drawn.

The concentrated infrastructure of the global fertilizer supply – with the enormous influence of individual chokepoints like the Strait of Hormuz and single plants like Ras Laffan – represents a systemic concentration risk. Around 46 percent of the globally traded urea originates from countries west of the Strait of Hormuz. This concentration is the result of decades of optimization for comparative cost advantages – cheap gas in the Gulf, high production efficiency, established trade routes. What was economically rational proves to be a strategic vulnerability in times of crisis.

Initial reactions to this realization are already visible: The EU is accelerating its fertilizer diversification strategy, several Asian countries are negotiating long-term supply contracts with alternative producers, and the US is holding talks on licensing and bilateral procurement agreements. A concept of agricultural input security is slowly emerging from the concept of energy security – but in the international political system, reactions traditionally take longer to form than crises.

The 2027 perspective: What will happen when the buffer is exhausted?

The 2026 stockpiles will protect against an immediate food catastrophe. However, they will not provide lasting protection. The real turning point for global food security is taking place in the weeks in which this text is being written – April and May 2026 are the critical planting and fertilization windows for the autumn and winter harvest in many parts of the world.

Farmers in South Asia, East Africa, and the Middle East are making decisions now: using less fertilizer, growing cheaper but lower-yielding crops, and reducing acreage. These decisions will be reflected in global grain volumes in 2027 – at a time when today's buffer reserves will have long since been depleted.

The FAO explicitly warned of the non-linear dynamics: Moderate reductions in fertilizer use lead to disproportionately large yield losses because farmers, who already operate with minimal inputs, apply every percentage point of fertilizer to critical points in plant growth. In regions with chronically underfunded agriculture, the buffer capacity is zero.

The global hunger index already stood at 319 million people acutely affected before the war. With an additional 45 million people at risk, it would climb to over 363 million – more than at the height of the Ukraine war. And this shock would not only mean the disruption of a grain corridor, but the erosion of the production base itself – harder to repair, with longer-lasting effects.

The silent epicenter

The Iran war is not an oil war with a minor agricultural footnote. It is an attack on the global food supply chain. Oil can be released from strategic reserves. Liquefied natural gas can be obtained, at least partially, from other sources. Fertilizer is a non-renewable resource, cannot be replaced by sovereign wealth funds, and will not arrive on time when planting deadlines have passed.

The crisis makes it clear that global food security is not just a question of grain reserves, but also of the security of agricultural inputs – a concept that is still barely institutionally anchored in the crisis management of industrialized nations. It is high time to systematically close this gap: through strategic fertilizer stockpiles, diversified production alliances, and risk mitigation measures for shipping through critical straits.

Until then, the farmers of South Asia and East Africa will decide in these weeks whether or not to use fertilizer for the 2027 harvest. And the rest of the world is watching the oil price.

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