The Iran War’s Unseen Fertilizer Crisis

How India Became the World’s Most Vulnerable Major Economy and China Its Most Consequential Actor.

As the US-led war on Iran enters its fourth week, the world has watched oil and LNG prices spike. But beneath these highly-visible shocks, a slower-moving crisis is taking shape—one that will likely outlast any tanker disruption and will probably be felt after hostilities cease. The Strait of Hormuz, through which a staggering share of the world’s crop nutrients normally flows, has become a fertilizer chokepoint. And as the Northern Hemisphere planting season accelerates, four countries have emerged as the critical actors in the drama: India, the most systemically vulnerable major economy; China, the swing producer prioritizing domestic stability; and Russia and Belarus, major fertilizer producers whose inability to ramp up output removes what might have been a safety valve for global markets.

India: The Triple Shock Economy

India sits at the unique and dangerous intersection of all three shocks emanating from the Persian Gulf. Its exposure is rooted in the basic arithmetic of feeding 1.4 billion people.

The Oil Shock. When Hormuz tanker traffic collapsed in early March, India faced an immediate crude shortfall—roughly half of its oil imports normally transit the strait. The response was swift: Chinese media reports Russian crude imports jumped 50 percent in the first week of March. The United States granted India a 30-day sanctions waiver. But the costs are compounding. India buys 88 percent of its crude internationally—roughly 5.8 million barrels per day. Every sustained $10 increase in oil prices worsens its trade balance by billions, forcing an impossible choice between passing costs to consumers or absorbing them through subsidies.

The LNG Shock. On March 3, QatarEnergy declared force majeure on LNG deliveries after alleged Iranian strikes shut down its Ras Laffan complex. For India, this was a direct hit: in 2025, Qatar supplied around 40 percent of India’s LNG imports—fuel for household cooking, power generation, and fertilizer production. The government has imposed emergency rationing, cutting industrial gas supply by 10 to 20 percent and reduced low-priced contract gas to city distribution companies.

The Fertilizer Shock. This is where India’s vulnerability deepens into systemic risk. The country imports a quarter of its urea consumption, and nearly 40 percent of that comes from West Asia. Domestically produced urea relies on imported natural gas—primarily sourced from Qatar, UAE, Saudi Arabia, and Kuwait. For phosphatic and potassic fertilizers, import dependence is even higher.

The timing could not be worse. The Northern Hemisphere planting season is underway across India’s vast agricultural belt. Fertilizer demand is intensely seasonal—if shipments are delayed past the optimal application window, farmers cannot wait. Rumours are circulating that Indian officials recently approached China, requesting permission to purchase urea cargoes as the war curtails gas supplies and weighs on domestic production but no details have been released. For the record, neither country has confirmed that Prime Minister Modi and Chairman Xi have spoken directly since the start of hostilities on February 28^th.

China: The Swing Variable

If India is the most vulnerable, China is the most consequential. Its decisions in the coming weeks will determine whether the fertilizer shortage becomes a manageable price spike or a global food crisis.

The Fertilizer Superpower

China is the world’s largest fertilizer producer. Its compound fertilizer output is forecast at 57.11 million tonnes for 2026. But this production capacity exists alongside a strategic orientation that has shifted dramatically in recent years. Once a major phosphorus fertilizer exporter—shipping 11 million tonnes in 2015—China has dramatically limited outbound shipments since 2021, focusing instead on assuring domestic farmers have access.

Analysts believe this could be a structural change to the global market—China may never return to its former export levels. Other producers like Morocco and Saudi Arabia have stepped up, increasing production by roughly 2.7 million and 3 million tonnes respectively. But no single country can replace China’s scale.

Beijing’s Decision: Prioritizing Domestic Supply

Since mid-March, Beijing has significantly tightened fertilizer export restrictions, effectively halting outbound shipments of most fertilizer types to secure domestic supplies as spring planting demand peaks. While official government announcements remain limited, multiple authoritative sources confirm the scope of these measures.

What China has done:

– Phosphate export ban. Since March 14, phosphate fertilizer exports—including monoammonium phosphate and diammonium phosphate—have been suspended until at least August. Customs authorities are no longer accepting export declarations for these products, and shipments that had been declared but not yet cleared have been delayed. Major producers including Yuntianhua, Xingfa Group, and Xinyangfeng have confirmed they have halted export declarations and shipments.

Urea restrictions maintained. The government has reiterated existing urea export restrictions, which operate through a quota system. No export quotas for 2026 have been issued to date. When asked about India’s request for urea exports, China’s Foreign Ministry declined to comment, directing inquiries to relevant authorities.
Compound fertilizer halted. According to multiple reports, authorities have instructed traders to suspend exports of nitrogen-potassium compound fertilizers.
Strategic reserves released. The China Agricultural Means of Production Association announced on March 13 that China will release fertilizers from national commercial reserves ahead of spring planting. The release, which includes nitrogen, phosphate and compound fertilizers, comes at least 15 days earlier than previous cycles.

The only major exception is ammonium sulphate, which accounted for about half of China’s fertilizer shipments last year and remains unaffected for now.

China’s Policy Decisions

Why This Matters Globally

China’s export curbs come at the worst possible moment. The Iran conflict has already choked fertilizer supplies from the Middle East, a major production and export hub. Global prices are surging—Chinese domestic urea spot prices have jumped nearly 40 percent since the conflict began. Farmers from the US to Asia and Europe are scrambling to secure supplies and lock in prices.

The cumulative effect is stark: the world’s largest fertilizer producer is effectively exiting the export market during a global supply shock, at the exact moment when planting decisions are being made across the Northern Hemisphere.

The Logic Behind China’s Choice

Beijing’s calculus is rooted in straightforward domestic priorities. The export controls are explicitly designed to ensure spring planting supplies and stabilize domestic fertilizer markets. As early as December 2025, industry associations had called on fertilizer companies to refrain from arranging phosphate exports until August 2026. By March 2026, with global prices surging, these guidelines became binding enforcement.

The China Agricultural Means of Production Association’s statement on reserve releases emphasized ensuring adequate supply during peak agricultural demand and stabilizing prices. A Beijing-based fertilizer analyst noted that some farmers in Henan and Shandong had already been complaining about phosphate fertilizer shortages.

China’s nitrogen fertilizer industry has also faced severe profit pressure. In this context, prioritizing the domestic market over exports is not just strategic—it is necessary to maintain social stability and food security.

The China Nitrogen Fertilizer Industry Association has projected record domestic urea production of 76.5 million tons this year, but that output is now clearly reserved for Chinese farmers first.

Russia: The Constrained Giant

If China has chosen to withdraw from export markets, Russia might seem like the logical alternative to fill the gap. It is, after all, the world’s largest fertilizer exporter, accounting for about one-fifth of global fertilizer trade. In 2025, Russian fertilizer exports reached 45 million tonnes, a 7 percent increase over the previous year. The country’s producers, including Acron and PhosAgro, have seen their shares rise modestly since the conflict began.

But appearances can be deceptive. Russia cannot ramp up output to compensate for lost Gulf supplies. Its capacity constraints are structural and immediate.

Limited spare capacity. Russian fertilizer producers are already operating at near-full capacity. The industry may increase production to at least 66 million tonnes in 2026, up from 65.5 million in 2025—a marginal gain of less than 1 percent. New export-oriented plants are not expected to come on stream before 2027.

Domestic supply obligations. Russian producers face binding commitments to the domestic market, especially ahead of the planting season. These obligations, first introduced in 2021, ensure that Russian farmers receive adequate fertilizer before any exports are permitted.

Recent infrastructure damage. On February 25, just days before the Iran conflict began, a Ukrainian drone attack struck Dorogobuzh, one of Russia’s largest fertilizer plants owned by major producer Acron. The attack temporarily knocked out about 5 percent of the country’s overall production capacity and killed seven people. Dorogobuzh alone accounts for 11 percent of Russia’s ammonium nitrate output and 9 percent of its NPK fertilizer production. This loss, coming at the worst possible moment, has permanently removed supply from an already tight market.

Long-term ambitions, short-term realities. The Russian Fertilizer Producers Association, led by Andrey Guryev, has articulated ambitious targets: capturing one-quarter of global fertilizer trade by 2030, with exports rising to 58 million tonnes. Individual producers like PhosAgro plan to produce over 12 million tonnes in 2026 and see potential for growth. But these are multi-year investment horizons. For the current planting season, Russian supply is effectively fixed.

The bottom line: Russia is already exporting at full tilt. There is no spare capacity to activate in an emergency. The world’s largest fertilizer exporter can help stabilize markets over time, but it cannot conjure additional tonnes in the next 90 days when they are needed most.

Belarus: The Sanctioned Producer

Belarus presents an even more constrained picture. As a major potash producer, its exports are critical for global fertilizer supply. But like Russia, it faces capacity limitations compounded by sanctions and logistical challenges.

Recovering but not expanding. Belarusian potash exports have returned to pre-sanction levels, according to President Alexander Lukashenko, who claimed in May 2025 that “potash fertilizer sales had now reached the pre-sanction levels.” Argus, a commodity price agency, projects Belarusian exports at around 10 million tonnes for 2026. But “recovery” is not the same as “surplus capacity.” Belarus is already shipping what it can produce, there is no idling excess capacity that can be activated.

Logistical adaptation, not capacity expansion. Belarusian exporters have demonstrated remarkable adaptability, shifting cargo from Baltic ports to Russian routes and offering potash at a discount to bypass sanctions . New infrastructure is emerging—Murmansk Bulk Terminal, for instance, commenced handling export potash in late 2025, with contracts to move up to 1.5 million tonnes in 2026, providing Russian and Belarusian exporters access to ice-free Arctic shipping lanes. But these are logistical workarounds, not new production. They help Belarus reach existing customers but do not increase the total tonnes available to global markets.

The bottom line: Belarus is producing at capacity and Belarusian exports are fixed. There is no hidden reserve waiting to be unleashed.

What This Means for Global Agriculture

The combined picture is sobering. The world has lost Gulf fertilizer supplies at the worst possible moment. China, the largest producer, has chosen to prioritize domestic stability over exports. Russia and Belarus, the other major producers, are already operating at or near full capacity with no ability to ramp up in the short term.

The consequences are already visible:

Price spikes. Chicago Board of Trade urea futures have risen more than 20 percent since February 28. Domestic Chinese urea prices have jumped nearly 40 percent.
Supply chain disruption. Shipping costs, insurance premiums, and freight rates are climbing.
Planting shifts. US farmers are already contemplating switching from corn to soybeans, which require less nitrogen fertilizer.

But the real impact will be delayed. Farmers across the Northern Hemisphere are making decisions now—with incomplete information—about planting density, fertilizer application rates, and crop mix. Those decisions, multiplied across millions of farms, will determine global food supplies for the next year.

The hardest-hit countries will be major fertilizer importers like Brazil and, most acutely, India. India depends on both direct Gulf imports and the global market that Russia, Belarus, and China collectively influence. With Gulf exports disrupted, China withdrawing supply, and Russia and Belarus unable to fill the gap, India faces a fertilizer squeeze during its critical planting season. Its officials have already made the unprecedented move of requesting Chinese assistance, a sign of the pressure New Delhi is under.

The arithmetic is unforgiving. There is almost no spare capacity anywhere in the global fertilizer system. Every tonne that would have been available is already spoken for. The only question is how the shortage will be distributed—and who will go without.

The Timeline Ahead

Three weeks into the crisis, the shape of what follows is becoming clear.

Weeks 1–2 (Completed): Oil spike; shipping insurance premiums skyrocket; India secures Russian crude waivers.

Week 3 (Current): LNG price surge; Qatari force majeure; Indian gas rationing begins; China announces fertilizer export curbs; Russia confirms limited spare capacity; Belarus continues operating at pre-sanction levels.

Weeks 4–12 (Coming): Fertilizer shortages and price spikes intensify as Gulf export losses combine with China’s export restrictions and the reality sets in that neither Russia nor Belarus can fill the gap. This collides with the final weeks of Northern Hemisphere planting. Farmers make last-minute decisions on application rates and crop mix.

6–9 Months from Now: Reduced fertilizer application translates into lower crop yields. Grain supplies tighten. Food price inflation accelerates. The human consequences—hunger, malnutrition, social unrest—begin to manifest.

Conclusion: The Strait That Feeds the World

The Strait of Hormuz has always been understood as an energy chokepoint. But this crisis reveals a deeper truth: it is also a fertilizer chokepoint, and by extension, a global food-system chokepoint. The 20 percent of global oil that transits the strait captures headlines. The 31 percent of globally traded urea and 23 percent of ammonia do not—until the planting season arrives and fertilizer is not there.

Heading into week four, the visible shocks have been painful. Oil spiked above $119 per barrel. LNG spot prices doubled. Shipping traffic through Hormuz collapsed. But some of the most consequential decisions are being made in Beijing, Moscow, and Minsk—not just Tehran or Washington. China’s choice to prioritize domestic supply removes the last major buffer. Russia’s inability to ramp up, confirmed by industry sources and compounded by recent infrastructure damage, closes the door on one potential alternative.

India stands at the epicentre of this vulnerability—a country of 1.4 billion people, structurally dependent on imported nutrients, with its planting season now colliding with a supply shock. It faces the triple shock alone, without the cushion of spare capacity anywhere in the global system.

The next three months will determine the next three years. And the world will learn that the narrow waterway separating Iran from the Arabian Peninsula is not just the pipe through which energy flows. It is the pipe through which a significant portion of the world’s nutritional capacity passes. A prolonged closure doesn’t just starve cars of fuel. It risks starving people of food.

Chinese sources on China’s key fertilizer announcements