In Focus: A Chain Reaction—War in Iran Causes Global Fertilizer Prices to Skyrocket

In just a few weeks, the price of urea has risen by about 50 percent. This is not just short-term market noise, but a structural warning sign.

Urea is the world’s most important nitrogen fertilizer. It provides plants with essential nutrients and is crucial for crop yields and global food production. If urea prices rise sharply, this has a direct impact on agricultural production and food prices.

The COVID-19 pandemic and the war in Ukraine have already shown how sensitive fertilizer markets are to geopolitical escalations and systemic shocks. The war in Iran fits seamlessly into this pattern.

Several structural factors are at play simultaneously:

• The Gulf region supplies around 45 percent of the world’s traded urea and is a key production hub for nitrogen fertilizers.
• About 30 percent of global seaborne fertilizer trade passes through the Strait of Hormuz, one of the most critical maritime chokepoints in the global economy (“Global Choke Point”).
• China, the largest producer and consumer of fertilizers, regularly responds to geopolitical crises with export restrictions to secure its own supply.

Supply shortages and cost pressures are converging at the same time, this time triggered by military escalation at a key “global choke point”: the Strait of Hormuz.

What does this mean for the world’s population?

Rising fertilizer prices are not limited to agricultural markets but have a direct impact on global food security:

• Farmers can no longer afford fertilizer or are reducing their use of it.
• Yields are falling, especially in price-sensitive and import-dependent regions.
• Food prices are rising worldwide.
• Hunger, social tensions, and political instability are on the rise.

Countries in the Global South that rely on fertilizer imports are particularly affected. However, lower-income households in industrialized nations are also coming under increasing pressure.

A fertilizer shock is therefore not merely an agricultural issue, but is becoming a systemic risk to food security and social stability.

The Real Message

It is not the regional conflict itself that is decisive, but rather the chain reaction within a highly interconnected system. Global choke points act as stress multipliers, rapidly transforming regional conflicts into global economic and social shocks.

In the current context, fertilizer prices serve as an early indicator: they demonstrate how quickly geopolitics, through second- and third-round effects, becomes a global issue of prosperity and security.

As early as 2025, the FERI Cognitive Finance Institute warned of precisely such escalation patterns at chokepoints like the Strait of Hormuz—in the German Cognitive Briefing „Global Choke Points – Maritime Engpässe als unterschätzter Risikofaktor für Weltwirtschaft und Geopolitik“. The analysis can be downloaded in German from the download section on this page.