The U.S.-Iran war removed 17% of the world's natural gas supply and more than 30% of global nitrogen fertilizer capacity, pushing granular urea futures on the U.S. Gulf coast toward $700 per metric ton at the peak of planting windows in India, Brazil, Australia and the United States.

The mechanics of the shock trace back to the Haber-Bosch process, developed by two German scientists between 1909 and 1913. The process pulls nitrogen from the air — 78% of the atmosphere — and splits it using pressure and heat derived from natural gas to produce ammonia. Synthetic ammonia underpins modern wheat, corn and rice production, and by Reuters' accounting now supports roughly 3.5 to 4 billion people, about every second person alive. Canadian scientist Vaclav Smil calculates in Harvesting the Biosphere that feeding today's population at pre-Green Revolution productivity would require more than half of the planet's habitable land.

The yield math frames what was at stake when fighting broke out. In 1960, the average global crop yield ran about 1,336 kg per hectare. By 2023 it had more than tripled to 4,490 kg, while total farmland expanded only 14%. The Green Revolution of the 1960s and 1970s — seed breeding combined with pesticides, mechanization and fertilizer — is credited with saving over one billion people from starvation, largely in the Indian subcontinent and Mexico.

Ships trapped, plants idled

The war trapped almost half of the world's exported sulfur, a critical input for phosphate fertilizers, inside the Middle East Gulf. Hundreds of ships sat at anchor, unable to transit the Strait of Hormuz — roughly 21 miles wide — because of the risk of Iranian attack. Natural gas plants shut down. Fertilizer manufacturers idled facilities. Missiles and drones destroyed or damaged other sites. Even if the Strait stays open, Reuters reports it will take months or years for some natural gas and fertilizer production to return to pre-war levels.

The price spike hit just as planting season opened in India, the U.S. and Australia. Chicago-traded granular urea FOB U.S. Gulf futures, tracked from January 2025 through July 6, 2026 using LSEG and USDA data, spiked during the conflict and then fell sharply after the end of the U.S. planting season and the possibility of a deal. Prices have since come down dramatically, but the damage to this crop year is already done: without nitrogen, yields slump, and less food will be harvested this year in some of the regions that need it most.

Import exposure determined how hard each market was hit. Australia, India and Thailand leaned more heavily on Gulf-origin fertilizer than other countries. India, balancing a huge population of farmers and urban consumers, bought enormous volumes of urea at high prices — product that is now off the market and unavailable to other buyers. Australian growers are expected to slash wheat acreage because current wheat prices will not cover the fertilizer bill. In parts of Africa, farmers struggled to find any fertilizer at all. Brazil, which imports a majority of its fertilizer, faced a narrower choice: strain finances buying expensive product, or apply less, harvest a smaller crop, and strain finances anyway.

Food index climbs, El Nino compounds the squeeze

The FAO Food Price Index, which tracks monthly international prices across cereals, vegetable oils, dairy, meat and sugar against a 2014–2016 base of 100, soared during the war, inflated by energy and fertilizer costs. Data run through June 2026, meaning the index still reflects partial-year conditions rather than a full post-war reading.

Weather adds a second layer of risk. India typically records below-average rainfall in El Nino years like this one, and past El Nino droughts have damaged crops and pushed some governments to restrict exports of basic foodstuffs. A separate supply shock from a resumed war, or any closure of the Strait of Hormuz, would replay the fertilizer squeeze — with Brazil, India, Thailand and Australia again the most exposed importers, based on 2024 urea trade data covering the Gulf states of Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

Reuters concludes that the war's supply shock, layered on El Nino, could keep food prices elevated for some time, with the heaviest burden falling on import-dependent growers and vulnerable populations. For fertilizer buyers, the report's central warning is structural: as long as ammonia depends on natural gas transiting the Gulf, the next conflict there can repriced the world's nitrogen bill within a single planting season.