Hormuz Closure Cuts Seaborne Sulfur Exports by a Third and Reroutes the Global Fertilizer Trade

Oil and LNG get the headlines, but the Gulf also ships a large share of the world's fertilizer and the raw materials used to make it. About a third of global seaborne fertilizer trade passes through the Strait of Hormuz. Qatar, Saudi Arabia, the UAE, Oman and Iran are big exporters of urea and ammonia, made from cheap local gas. The region is also one of the biggest sources of sulfur, a by-product of oil and gas processing that phosphate fertilizer plants need.

Six months into the closure, the fertilizer trade has been rebuilt around the gap. It cost a lot to do it, and it isn't finished.

What stopped

The collapse was sharpest in sulfur. Gulf sulfur shipments in June were about 147,000 tonnes. In a normal June the range is 730,000 to 1.2 million tonnes. Global elemental sulfur exports in the first half of 2026 fell 33 percent, from 13.5 million to 9 million tonnes.

Nitrogen and phosphate fertilizer exports each fell 9 percent worldwide in the first half compared with a year earlier. The short June-July ceasefire window moved almost no fertilizer out. It was too brief and too shaky to plan voyages around.

Prices spiked, then partly eased

Urea peaked in late April at roughly 80 percent above its January 1 level. Ammonia peaked in May. Both had come back to around January levels by the end of August, as other suppliers stepped in.

Phosphate fertilizers, MAP and DAP, rose 25 to 30 percent after the closure and have stayed high. Sulfur has more than doubled since the start of the year. It's up over 40 percent just since the strait closed.

Who filled the gap

Supply shifted to exporters outside the Gulf, most of them further from the buyers.

• China's nitrogen exports rose 47 percent, to 2.8 million tonnes.
• US nitrogen exports rose 60 percent. Ammonia exports rose 56 percent, and urea exports nearly tripled.
• Morocco, Russia and Egypt made up part of the phosphate shortfall.

For shipping, this means longer voyages. Urea that used to go from Qatar to India in about a week now comes from the US Gulf, across the Atlantic and around Africa or through Suez. Fertilizer mostly moves on handysize and supramax bulkers, so it's that end of the dry bulk fleet that picks up the extra miles.

Governments made it harder

Export controls turned a shipping shortage into a policy one. China suspended sulfuric acid exports in May, and its first-half shipments fell from 2.19 million tonnes to 784,000. Russia extended its sulfur export ban through the end of 2026. India suspended sulfur exports. Kazakhstan's sulfur exports stopped for nearly a month in June and July after Russia banned transshipment through its ports.

The result is a sulfur shortage showing up in factories. Mosaic idled phosphate production at its Louisiana plants in August because it couldn't get enough sulfur. Saudi Arabia's Maaden cut its 2026 phosphate output guidance.

Who is most exposed

India has taken the biggest hit. It relies on Gulf LNG to run its own nitrogen plants, so the closure cut both its imports and its domestic production. Nitrogen imports are up 52 percent, and the government's fertilizer subsidy bill is now expected to reach about 3 trillion rupees ($31 billion), against 1.71 trillion budgeted.

Brazil is next. It buys most of its nitrogen from September to December for the safrinha corn crop. Its nitrogen imports are down 19 percent so far this year, and buyers are delaying purchases in the hope prices fall. If they wait too long, they'll be competing for the same scarce cargoes and ships at the same time.

The EU's nitrogen imports have dropped by half, about 1.6 million tonnes.

Food prices move on a lag. Fertilizer bought this autumn goes into crops harvested next year. The ships that aren't leaving the Gulf today will show up in grocery prices in 2027.