Loading ...Everyone is focused on oil, but they should be worried about food.
Global oil inventories fell by 250 million barrels in March and April. JPMorgan warned stockpiles in the wealthy world could drop to “operational stress levels” next month and to an “operational floor level” by September. Oil prices are going to go higher because everyone knows the Persian Gulf is the world’s gas station. Most people don’t know it is also the world’s chemistry set.
The same petrochemical plants in Qatar, Saudi Arabia, the UAE, Kuwait, and Iran that ship crude oil and liquefied natural gas (“LNG”) also ship out the nitrogen, sulfur, and phosphate inputs that feed roughly half the planet.
The Persian Gulf accounts for at least 20% of global seaborne fertilizer exports. The Middle East supplies 46% of globally traded urea. Iran by itself is the world’s second-largest urea exporter. The Strait of Hormuz handles nearly half of global seaborne sulfur trade. It also carries about one-third of seaborne methanol. These Gulf commodities are the primary engine of global food supply.
Natural gas is processed into ammonia. When combined with CO2, it creates urea, the world’s most widely used nitrogen fertilizer for crop growth. Sulfur (a byproduct of gas and oil refining) is converted into sulfuric acid. This acid is the essential solvent used to dissolve phosphate rock to create phosphate fertilizers. Methanol is primarily a fuel, but it also serves as a critical processing agent and precursor for various specialized agricultural chemicals and formaldehyde-based fertilizer coatings that control nutrient release.
In summary, the Gulf provides both the energy (gas) to create nitrogen and the acid (sulfur) to unlock phosphorus – the two critical fertilizers that feed the entire world.
Shipping intelligence firm Kpler reported that fertilizer loadings in the first month of the war fell to roughly 1.5 million metric tons (“mt”), from about 3.4 million in the same period of 2025. That is a 56% drop in one month, on a product that does not store as well as crude oil and does not have a strategic reserve to draw down.
Sulfuric acid is a critical leverage point for the world’s economy. It is the most widely used industrial chemical. It is the feedstock for phosphate fertilizers. You cannot make DAP or MAP without it. DAP is the most widely used phosphorus fertilizer in the world. MAP, the world’s other main fertilizer, is used in areas where alkaline levels are high.
The real crisis – the food crisis – didn’t really begin until May 1. That’s when China, the world’s largest exporter of sulfuric acid, banned all sulfuric acid exports.
A lot of poor people are about to starve.
India’s exposure, in particular, is terrifying because 80% of India’s ammonia comes through the Persian Gulf. India is 60% dependent on imports for its fertilizer needs overall. And India is gearing up for the kharif planting season – rice, cotton, maize – that begins in June with the monsoon.
Bangladesh is the next domino. Bangladesh imports roughly 1.7 million tonnes of urea, 700,000 tonnes of TSP, 1.5 million tonnes of DAP, and 1.2 million tonnes of MOP (muriate of potash) a year — and the USDA describes its DAP and MOP markets as “fully” or “mostly” import-dependent. The country’s 170 million people get their rice from this imported fertilizer.A 28% urea price increase in three weeks doesn’t matter much to a Maryland soybean farmer hedging on the Chicago Board Of Trade (“CBOT”) futures exchange. It is a different sentence when 60% of your country’s fertilizer is imported, 80% of your ammonia comes through the Strait of Hormuz, your harvest is single-cycle and rain-fed, and your purchasing power is already gutted. And there’s no diesel, either.
If urea and DAP are not on the docks in Mumbai, Chittagong, and Karachi by mid-June, the yield damage is locked in for this crop year. The famine would hit Southeast Asia by the end of the year.
We already know what will happen because, in April 2021, the Rajapaksa government of Sri Lanka banned chemical fertilizer imports. The government intended to make the country the world’s first 100% organic farming nation. The country went from being a rice exporter to importing 783,420 tonnes of rice at the peak of the crisis at a cost of $292.5 million – its first large-scale rice imports in decades. Sri Lankan rice output has still not returned to its pre-ban peak of 3 million metric tons. The food inflation that followed contributed to the country’s worst economic crisis in over 70 years.
That was one country that went seven months without global fertilizer. It is hard to imagine what will happen to the people of Southeast Asia if the Persian Gulf isn’t completely re-opened in the next month.