With the Strait of Hormuz effectively closed in early 2026, it drove up oil prices. That unleashed a fertiliser shock that has commodity desks hurriedly reassessing risk models. What was a background market suddenly became front-page news, as one third of globally traded fertiliser was stranded overnight and prices for nutrients spiked double-digits in days.
Across RadarRadar, this crisis reinforces a simple truth: markets are interconnected, and teams cannot succeed in silos. Energy and agriculture are intertwined, and visibility across these links is essential for risk awareness. Below, we break down how the Hormuz chokepoint crisis triggered a chain reaction from oil to fertiliser to food—and why risk managers are dusting off dormant models (like fertiliser VaR) to cope with volatility.
The Hormuz Crisis Puts Fertiliser Risk on the Radar
Mar 13, 2026 - Rotterdam
On 1 March 2026, geopolitical conflict erupted into an energy supply shock: the Strait of Hormuz a 21-mile-wide maritime chokepoint between Iran and Oman was declared closed to commercial shipping, cutting off passage for about 20% of the world’s oil and LNG. In the days immediately after, Brent crude oil prices spiked violently, reflecting the sudden loss of supply. Brent, which had been trading around the mid-$60s per barrel in January, surged to $94 by 9 March and in early trading briefly hit $119.5 – the highest oil price since 2022. This ~65% price jump in a matter of weeks was the largest single-day move in oil markets’ recent memory, sending traders and central banks alike scrambling to gauge the inflationary impact.
Although prices pulled back below $100 after emergency measures were floated (e.g. potential strategic oil reserve releases), the message was clear: a critical chokepoint had put the energy market on edge.
What caught many off guard was the chain reaction on the fertiliser side. The Middle East is a cornerstone of the global fertiliser supply. Natural gas (much of it from Qatar and Iran) is the primary feedstock for making ammonia and urea fertilisers, and those same Gulf states produce a large share of the world’s nitrogen fertilisers outright. So, when Hormuz closed and Persian Gulf energy exports stalled, the impact hit fertiliser markets within hours.
In fact, roughly one-third of all fertiliser trade worldwide passes through Hormuz, so the blockade effectively removed a huge chunk of available supply overnight. Prices responded accordingly: global benchmark urea fertiliser, which had been hovering around $450–$480 per tonne in late February, shot above $600 in early March. Urea barge prices in New Orleans (NOLA) jumped from an average ~$475/ton to $520–$550 in just one day. In the U.S. Midwest, a major market for nitrogen inputs, urea spiked ~13% in 48 hours (from $475 to over $600) as traders panicked over spring supply.
Why did a spike in oil and gas prices so directly translate to a spike in fertiliser prices? Natural gas is the key ingredient for nitrogen fertilisers like ammonia, urea, and UAN. Through the Haber-Bosch process, gas is converted to ammonia a process that is extremely energy-intensive. Gas typically accounts for 70–80% of the production cost of ammonia/urea. This means fertiliser prices closely track natural gas prices in many cases.
When Gulf LNG became scarce and expensive (Qatar’s Ras Laffan complex – the world’s largest LNG + fertiliser site – was temporarily shut after drone strikes), the cost to produce each tonne of fertiliser jumped in tandem. Factories outside the Gulf also felt the pain: European gas markets blipped upward on fears of tighter LNG supply, and even in the U.S. (with domestic shale gas) the global nature of the fertiliser trade pulled domestic prices up.
One often-overlooked aspect is the “just-in-time” nature of fertiliser logistics. Unlike oil, there are no strategic stockpiles of nitrogen fertiliser in the West. Most importers and even farmers operate with relatively low inventory, especially heading into the planting season there’s a reliance on continuous flow from producers. So, when the flow stops, there isn’t a big reserve to tap (unlike strategic petroleum reserves which can soften an oil shock). This lack of buffer meant that the price response was sharp and rapid, as buyers bid up available tonnes and worried about securing enough for spring sowing.
Jane’s Intelligence warned that elevated gas prices from the conflict “will very likely add pressure to increases in global fertiliser costs” and risk “global food price instability” if prolonged.
For much of 2025, fertiliser market risk was not exactly front-page news. Prices had actually moderated from the extreme highs of 2022, and many trading desks were laser-focused on energy markets, carbon, and other headline commodities. The Hormuz crisis changed that in an instant. Suddenly, a market that some risk managers hadn’t revisited in months demanded immediate attention.
In our network, we’ve observed analysts re-activating Value-at-Risk (VaR) models for fertiliser exposure, stress-testing portfolios for a new upside price scenario that few had seriously contemplated. Market volatility has erupted to levels not seen since the aftermath of Russia’s Ukraine invasion. In the first week of March, fertiliser price variability (daily swings, bid/ask spreads) spiked dramatically alongside the outright price levels. This kind of volatility poses a challenge: it can render traditional hedging more difficult (illiquid forward markets, wider spreads) and it elevates VaR just as exposure is rising. A double hit for risk managers.
Food manufacturers (FMCGs) are now facing a triple hit of higher energy, higher freight, and higher ingredient costs. Risk awareness means understanding those second order and third-order connections before they appear on the balance sheet.
The 2026 Hormuz crisis is a textbook example of what we at RadarRadar emphasise: visibility across interconnected risks isn’t a nice-to-have. It’s a must-have essential for modern commodity markets. A seemingly regional conflict over a narrow waterway has set off a global chain reaction, from energy prices to farm costs to food shelves. For commodity professionals and risk managers, this is a wake-up call to revisit assumptions and ensure that “unlikely” scenarios are not unseen. Volatility is the new baseline, and dormant risks can awaken overnight.
As you assess your exposure in light of these events, consider the full picture. Are your risk models capturing cross-market linkages? When was the last time you stress-tested a fertiliser supply shock or a simultaneous energy-agriculture upheaval? These are not theoretical anymore; they’re happening in real time.
At RadarRadar, our mission is to provide 360° market visibility to help you anticipate and respond to exactly these kinds of shocks. We’re closely tracking the Hormuz fallout across oil, LNG, fertiliser, freight, and food markets to keep our clients informed with data-driven insights. Now is the moment to re-examine your commodity exposure: ensure your strategies are robust to supply chain disruptions, and seize opportunities (such as hedging or alternate sourcing) that arise from dislocations.
If you’re looking to deepen your risk awareness and build resilience against the next chain reaction, let’s have a conversation. We’re here to help you connect the dots and get your commodities in control.