Fertilizer Ships Face Long Backlog Even If Hormuz Reopens

An interim U.S.-Iran deal to reopen the Strait of Hormuz is unlikely to immediately restore fertilizer shipments as shipowners assess safety conditions after months of conflict. The fertilizer trade has been heavily disrupted, with over 40 vessels carrying about 1 million tons of fertilizer stranded and weekly exports down 90% from pre-conflict levels. Analysts expect oil and LNG shipments to be prioritized first, meaning fertilizer flows and market adjustments will resume gradually as vessels clear and trade stabilizes. The Gulf region is home to some of the world’s largest fertilizer plants, and the waterway handled about one-third of the global trade in urea. The months of disruption have left large volumes of urea and other fertilizer products trapped behind the strait, sitting aboard vessels unable or unwilling to transit the waterway. Fertilizer cargoes are unlikely to be among the first shipments to move, with oil and LNG tankers expected to receive priority. The continued delays come as much of the Iran war premium has evaporated from the fertilizer market, with prices of urea plunging more than 30% since mid-April. However, prices in the U.S. are still 10% higher than a year earlier. The ships stranded in the Gulf region are carrying around 1 million tons of fertilizer, with roughly 40% of that already committed to India, but the remainder could return to the market once transit resumes, potentially further weighing on prices.