Fertilizer shipments likely to face prolonged delays even after Hormuz reopens

Fertilizer shipments through the Strait of Hormuz are unlikely to resume normal levels immediately, even if the United States and Iran reach a lasting ceasefire. A backlog of vessels, higher war-risk insurance costs, and continued security concerns will likely disrupt maritime trade for an extended period.

The Strait of Hormuz has been closed to commercial shipping since late February, after U.S. and Israeli strikes on Iran led Tehran to block the passage. According to Kpler, the route typically handles 30–35% of global seaborne urea trade and 20–30% of ammonia shipments. Approximately 515 vessels remain anchored or stalled in the region. Shipping executives and traders told Bloomberg that clearing the backlog will take months, as mine-clearing operations continue and insurers are unlikely to reduce war-risk premiums, which have increased tenfold since before the conflict.

The disruption intensified on June 20 when Iran announced a renewed closure of the Strait of Hormuz, accusing Israel of violating the Islamabad memorandum of understanding through military operations in Lebanon. U.S. Central Command rejected the claim, but vessel traffic remains sharply limited. Market participants expect fertilizer prices to stay elevated through the Northern Hemisphere fall application season, with a significant recovery in Gulf fertilizer exports unlikely before 2027.

Source: Bloomberg