S&P Global Warns Hormuz Energy Shock Could Become a Global Food Crisis

The Strait of Hormuz is a major maritime trade route connecting energy-producing areas with global markets. It matters because ships carrying oil, gas, and fertilizer ingredients use this narrow passage. When traffic is disrupted, countries far beyond the region can face higher costs and shortages.

Before the February offensive in Iran, half of the world’s fertilizer feedstock exports passed through the strait. Those feedstocks include natural gas, ammonia, urea, sulfur, hydrogen, and nitrogen. They help produce nitrogen fertilizer, which supports large-scale corn, wheat, and rice farming.

The strait closed to nearly all shipping on February 28, sending fertilizer prices rapidly to twice their previous levels. Although shipping has resumed, control remains precarious. The article reports that restoring natural gas supplies could take months or years, leaving food prices and hunger risks elevated.

The article states that one half of all global fertilizer feedstock exports passed through the Strait of Hormuz before the United States and Israel began their February military offensive in Iran. These exports supplied materials used to make nitrogen-based fertilizers.

The figure is important because fertilizer feedstocks are not minor farm inputs. They include natural gas, ammonia, urea, sulfur, hydrogen, and nitrogen. Modern production of staple crops such as corn, wheat, and rice depends heavily on these chemical fertilizers, especially in industrial monocropping systems.

When the strait closed to nearly all shipping on February 28, fertilizer prices rapidly doubled. The route is no longer completely stalled, but its control remains precarious. Any renewed disruption could again affect farm costs, harvests, food prices, and hunger, especially in poorer countries.

Fertilizer production depends on energy and chemical feedstocks moving through global trade routes. Natural gas is especially important because it supplies the feedstock for nitrogen-based fertilizer. If ships cannot pass through a major route, factories may lose inputs or face much higher transport and replacement costs.

The Strait of Hormuz illustrates this mechanism. Before the disruption, half of fertilizer feedstock exports passed through the waterway. After it closed to nearly all shipping on February 28, fertilizer prices rapidly doubled their previous levels. The shock came from restricted supply and increased uncertainty.

The effects can continue after shipping resumes. Fertilizer companies may wait months or years for Gulf natural gas production to recover. The IMF projects fertilizer prices will rise 10 percent by year’s end, adding pressure to food costs in 2026 and 2027.

Corn, wheat, and rice are staple foods grown largely in industrial monocropping systems. These systems depend heavily on chemical fertilizer to meet production needs. When fertilizer prices rise, farmers must spend more to maintain yields, and those higher costs can move through supply chains into food prices.

Diesel adds another pressure. Farmers use it as an important input cost, so more expensive fuel raises the cost of planting, harvesting, and transporting crops. The article also notes that farmers may direct acreage away from food production toward feedstocks for biofuels when energy prices and biofuel demand are strong.

This creates a double squeeze: production becomes more expensive while less land may produce food. The IMF projects fertilizer prices will rise 10 percent by year’s end, contributing to higher food costs in 2026 and 2027, with regional differences.

The poorest countries are most vulnerable when food prices rise because their households have less financial room. The S&P Global report says food costs account for about half of household spending in low-income countries. A modest price increase can therefore remove money needed for other basic needs.

The pressure comes from several directions. Higher energy and fertilizer costs raise farm and transport expenses. Biofuel-linked demand can divert acreage from food production, while El Niño-related weather risk may reduce supplies. Together, these forces make staple foods harder to afford, especially for cash-strapped consumers.

The consequences can extend beyond hunger. The article identifies food price shocks and staple-food inflation as key drivers of conflict, and many experts link the Arab Spring to rising food costs. More hunger amid geopolitical tensions could increase civil unrest in coming months.

The article does not name alternative trade routes or specific replacement fertilizer sources. It focuses on the Strait of Hormuz and warns that restoring Gulf natural gas production could take months or years. Any useful response would therefore need to reduce reliance on one route and one cluster of energy-based inputs.

Using multiple shipping routes, expanding fertilizer production in other regions, and storing key inputs could spread supply risk. Farmers could also improve fertilizer efficiency, recycle nutrients, and use farming systems that rely less on synthetic nitrogen. These are general possibilities, not measures assessed in the source article.

The article’s immediate reality is continued fragility. The strait is no longer at a standstill, but violence and disruption remain the new normal. Diversification would matter because fertilizer prices have already surged, while higher energy and fertilizer costs threaten food security for poorer countries.

Nitrogen fertilizer is a chemical farm input made using materials such as natural gas, ammonia, urea, sulfur, hydrogen, and nitrogen. It supplies nitrogen that crops need for growth and production. The article presents it as a foundational input in today’s agrifood systems.

Modern agriculture has become dependent on it because staple crops are grown mainly in industrialized monocropping systems. Corn, wheat, and rice are almost entirely produced in these systems, which require chemical fertilizers to meet their production needs. That dependence links harvests to energy and fertilizer supply chains.

The risk is global rather than local. If fertilizer chains are compromised, the article says half of the world’s calories are at risk. Prices already doubled after the Strait of Hormuz closed to nearly all shipping, and production may take months or years to recover.