Global Ammonia, Urea Trade Flow At Risk On Strait Of Hormuz Closure -- Rystad Energy

KUALA LUMPUR, March 31 (Bernama) -- Global fertiliser and ammonia trade could be disrupted as the sale of 15 per cent of global ammonia, and 21 per cent of urea -- a high-nitrogen fertiliser -- is tied to West Asian exporters potentially impacted by the closure of the Strait of Hormuz, according to Rystad Energy.

In a research note, the firm said the exporters include leading producers Saudi Arabia and Qatar, followed by Kuwait, Bahrain, the United Arab Emirates (UAE), Iran and Iraq

“The sustained logistics disruption will threaten the already strained ammonia and urea market, and quickly spill over into food and agriculture supply chains, particularly in countries most exposed to these trade flows,” it said.

Rystad Energy senior vice president and global head of hydrogen Minh Khoi Le said that more than one-fifth of urea traded by these West Asian exporters has direct implications for crop growth and farming, with India being the most exposed, importing around six per cent to eight per cent of its fertiliser from these Gulf countries.

“The strait’s closure can translate into real downstream risk quickly, including possible food shortages, manufacturing disruptions, compromised water integrity, and other significant global challenges, depending on the length of the war,” he said.

Global ammonia trade stood at approximately 10.9 million tonnes per annum (Mtpa) in 2025, down from 12.3 Mtpa in 2024, according to the statement.

It said that around 15 per cent of this could be impacted by a prolonged blockade of the strait -- mainly from Saudi Arabia, which would be affected, as most of the supply and trade occur on its east coast.

“Additionally, if there are disruptions to fertiliser supplies in the agriculture sectors, Rystad predicts a decline in total global food crop production.

“For urea, the share of exposure is even greater. Global urea trade stood at around 50.8 Mtpa in 2025, of which approximately 10.6 Mtpa comes from the impacted countries -- mainly Saudi Arabia, Qatar, and the UAE,” it said.

While producers with assets in other countries can ramp up fertiliser production, regions such as Europe often face higher production costs, leading to higher food prices and potential inflation risks, said Rystad Energy.

However, the firm noted that recent developments in green and electrolytic ammonia could provide a partial solution, especially for supply security, by reducing the dependency of nitrogen fertilisers on fossil fuels.

-- BERNAMA