Middle East disruption could slash 35% of global urea trade

For supply chain managers in the agricultural sector, the Middle East remains the single most critical—and fragile—node in the global fertiliser trade. The concentration of production and export infrastructure in this volatile region creates a structural vulnerability that no amount of inventory buffering can fully mitigate, directly tying procurement stability to distant geopolitical flashpoints.

The global fertiliser market is confronting a persistent strategic vulnerability that extends far beyond the well-known fluctuations in urea prices. At the Australian Grains Industry Conference (AGIC) in late July 2026, Isaac Zhao, Senior Principal Analyst Lead with China Fertilisers, delivered a stark warning: the Middle East remains the linchpin of global fertiliser stability, and its geopolitical frailties pose a direct threat to agricultural supply chains worldwide. While the world has scrambled to build alternative supply sources in the wake of the Iran conflict, the reality is that no substitute can fully replace the region's outsized role in producing and exporting the key raw materials — urea, sulphur, and phosphates — that underpin modern food production.

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Over 60% of the world's elemental sulphur supply originates from Middle Eastern refineries, primarily shipped through the Strait of Hormuz.

The Middle East's strategic importance is built on a combination of geology and energy infrastructure. The region is the world's largest exporter of urea, a nitrogen-rich fertiliser critical for boosting crop yields, with Saudi Arabia, Qatar, and Iran alone accounting for an estimated 35% of global trade. Equally crucial is sulphur, a byproduct of oil and gas processing, which is essential for manufacturing phosphate fertilisers. Over 60% of the world's elemental sulphur supply originates from Middle Eastern refineries, primarily shipped through the Strait of Hormuz. This narrow waterway, just 21 nautical miles wide at its narrowest point, is the arterial route for a significant portion of agricultural inputs onto global markets.

The Iran conflict of the early 2020s served as a brutal reminder of how quickly these arteries can clot. Shipping disruptions, heightened insurance premiums, and the threat of targeted attacks on vessels forced buyers to scramble for alternatives, pushing prices to historic highs. Australian farmers, who import over 2.5 million tonnes of fertiliser annually—with the Middle East typically supplying more than half of the urea—felt the pinch directly. In response, Australia and other nations accelerated efforts to diversify supply, investing in domestic production capabilities and forging ties with producers in Southeast Asia and North Africa. Yet as Zhao pointed out at AGIC, these alternatives remain insufficient to fully insulate global markets from a major Middle East disruption. "Alternatives had emerged," he noted, "but world markets were still susceptible to substantial supply chain shock if access to freight routes remained constrained."