Global headlines and water-cooler conversations have in recent weeks focused on the rising price of oil caused by Iran’s curtailment of most commercial shipping through the Strait of Hormuz, the narrow passage that connects the Persian Gulf to the Arabian Sea. Yet there’s another commodity that has received less attention despite being capable of triggering not just economic but also major social and political upheaval: fertilizer.
In normal times, about one-third of the world’s fertilizer supply moves through the strait. This is because the UAE, Saudi Arabia and Qatar are major producers of ammonia and of nitrogen fertilizers like urea, one of the most widely used fertilizers in the world. That production has been disrupted by the war, with global urea exports projected to drop to 1.5 million metric tons this month as a result. That is a 70 percent decline from the prewar level of 3.5 million, according to Scotiabank.
It may seem like an obscure product to focus on, but the importance of fertilizer cannot be overstated. For a stark example of what a global fertilizer shortage could engender, recall the dramatic events that roiled Sri Lanka earlier this decade.