Yes — Hormuz matters for way more than oil and gas: A big chunk of the Gulf region’s food imports goes through the Strait of Hormuz — around 70%, Neil Quilliam, associate fellow at think tank Chatham House, was quoted as saying by Reuters. And when it comes to the region’s agriculture sector, roughly one-third of global fertilizer shipments pass through the strait. Nitrogen fertilizers, which are used for half of global food production, mostly come from the Gulf and move through the strait.

By the numbers: Around 55-60 mn tons of urea are shipped by sea annually, with the Middle East accounting for some 40-50% of that volume. Iran exports roughly 5 mn tons, while Saudi Arabia contributes around 4-5 mn tons through producers like Sabic. Qatar accounts for roughly 11% of global urea exports, according to Bloomberg Intelligence analyst Alexis Maxwell. The country exports some 5.5-6 mn tons of urea and ammonia annually from its Qafco complex.

With shipping through the passageway disrupted, fertilizer markets are already repricing the risk — raising the prospect of higher crop input costs and, eventually, food prices. The rise in oil and gas prices also amplifies the pressure, since natgas is the main input for nitrogen fertilizers. “Natural gas’ key role as a fertilizer input could hit agricultural producers, impacting food prices,” MENA Director at Horizon Engage Andrew G. Farrand tells EnterpriseAM.

Market reax: Prices for granular urea jumped USD 60 per ton after the effective closure of the strait. In the US Gulf, spot for urea jumped USD 60-80 from last week, with traders warning that increases could follow if disruptions persist. Buyers are already eyeing other markets like North Africa and Southeast Asia for supplies, Bloomberg Green Markets reported.

For import-dependent Gulf economies like ours, the question is not whether fertilizer markets move — but how quickly those shocks filter into the region’s food supply chain. The UAE imports between 80 and 90% of its food supply, and a large portion of imports comes from Iran itself, which has banned the export of food and agricultural products indefinitely.

Officials have urged calm, with the Economy Ministry confirming it has four to six months’ worth of stockpiles of essential commodities on hand.

And retailers are already scrambling to reinforce food supply chains: UAE retailer Lulu Group began chartering cargo flights to secure the food supply chain, with a freighter that carried around 80 tons of fruits and vegetables from India landing in Abu Dhabi. Additional shipments are being arranged.

Market players don’t expect a major hit in the near term, but the concern is whether the disruptions are prolonged. “A huge portion of the region’s food supply is imported into the UAE and re-exported out,” Kurtz said. That logistics scale, combined with extensive cold-chain infrastructure, helps absorb short-term shocks.

What can be done?

Alternative export routes — such as air freight or trucking corridors via friendly neighbors — may offer limited relief, but they are slow and significantly more expensive. If disruption through Hormuz persists, the UAE’s highly efficient import system can keep food flowing but at a higher cost.

The government also coordinates with and supports agricultural businesses in the country in terms of logistics, which helps offer support even in the case of a sustained disruption, Kurtz added.

Subsidies could come at some point: “It may be that ⁠governments choose to absorb some of that cost through subsidizing the food. And they've certainly done that in previous crises, Reuters quotes Justin Alexander, Gulf analyst at GlobalSource Partners and director at Khalij Economics, as saying.

This could be local high-tech agribusinesses’ time to shine, but bottlenecks remain

Gulf growers carry several weeks — five to eight — of core inputs on hand, including fertilizers, helping cushion short disruptions, CEO of Pure Harvest Sky Kurtz tells EnterpriseAM. High-tech growers like Pure Harvest also use very little fertilizer as part of their precision farming methods, he explained.

Fertilizers may not even be the first agricultural bottleneck to bite: For Pure Harvest, specialty inputs such as pollinators and biological pest-control supplies can become harder to replace before fertilizer shortages become tight, Kurtz tells us. That means prolonged disruption can start weighing on yields through the wider agricultural input chain — not just through urea prices alone.

Looking ahead

The UAE has a target to slash its reliance on imports for food supply to just 50% by 2050 and has several initiatives in place to grow climate-adaptive crops and boost local output in areas like Ras Al Khaimah. It also encourages further innovation in the sector through initiatives like the AGRIX Accelerator and the Food and Agriculture Entrepreneurs Pro.

“Long term, if this results in the region rethinking its policy and its tolerance of imports, this could present [a prospect] for us to have higher quality and greater variety of products in the market, as well as true intangible food security, economic diversification gains, capital formation, and huge foreign direct investment,” Kurtz said.

The major challenge for players like these? Access to capital, Kurtz noted, highlighting the need for a development finance institution-style entity to provide low-cost, long-term infrastructure project financing. This would allow high-tech agribusinesses to scale and offer products at lower costs to compete with cheaper imports, he added.

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