After Israel launched strategic strikes against Iran, fertilizer analysts are watching for the after effects.
“Nitrogen markets reacted overnight, significantly higher,” says Josh Linville, vice president of fertilizer at StoneX. “There’s a significantly higher urea market, at least in the North American marketplaces up about $50 to $60 a ton. International markets are up substantially as well as the market starts to factor in these wartime premiums, even though no production has been impacted.”
The geographical region in the Middle East is significant for production overall and has critical infrastructure for the global trade of nitrogen fertilizer and potash.
In 2024, Iran was the third largest global exporter of urea (4.5 million tons), and the country was the seventh largest exporter of anhydrous ammonia (800,000 tons). Other urea producers in the geographic region include Qatar, which is the second largest producer; Saudi Arabia, which is the sixth largest; and Oman, which is the seventh largest producer.
“Iran is obviously a major powerhouse,” says Josh Linville, vice president of fertilizer for StoneX.
He equates its importance in the global fertilizer trade volume equal to that of China.
“We spend a lot of time talking about how China can ebb and flow the marketplace based on their participation or lack thereof,” he says. “Iran is very, very close to the same size of what China normally is, so this could be the same as losing another China to the world.”
At the current moment, Linville isn’t concerned for damage or destruction of Iranian supplies of fertilizer.
“Israel’s attack on Iran was surgical. They went after the nuclear program and those attacks to it,” he says. “They’re not looking to take out [fertilizer] facilities, production.”
And the same goes for Iran’s response in attacking Israel, which is the fourth largest potash manufacturer.
“Iran, they’re looking for more of the population strike. They are trying to get the news worthy videos and attacks from that standpoint,” he says. “They’re not really targeting infrastructure, either. They’re not going after things like potash manufacturing.”
Linville’s colleague at StoneX, Arlan Suderman, details why this conflict is being watched so carefully if the concern isn’t in those two countries’ production.
“There’s a lot of other producers of fertilizer in the Middle East and a lot of it also passes through the Strait of Hormuz, which will be at risk going forward now,” Suderman says.
From a global supply standpoint, Suderman also points out the Ukrainian attack of one of Russia’s largest nitrogen fertilizer plants two weeks ago.
With ongoing and new conflicts and strikes in key fertilizer production areas, Linville foresees needing to be focused on the potential outcomes.
“For now, we don’t believe there’s going to be much in the effect in terms of fertilizer production from either country, though it would be a little silly to not consider it, so we’re watching very, very closely,” he says.
