Safeguarding food security amid the Hormuz crisis

Global food security is increasingly shaped by shocks originating outside the agricultural sector. The closure of the Strait of Hormuz on 28 February 2026 severed one of the world’s most concentrated chokepoints for fertiliser and energy trade. Before the closure, Persian Gulf producers reliant on the route accounted for approximately 40% of global urea trade, while nearly 20% of global oil supply and more than 20% of global liquefied natural gas trade passed through the Strait.

In this new policy brief, ICC examines how the disruption is affecting agricultural value chains, setting out six priorities for governments, international institutions and industry to protect future harvests.

A compound shock across agricultural value chains

Between February and April 2026, the World Bank’s global fertiliser-price index rose by 44%, while its urea benchmark increased by 82%. At the height of the disruption, industry estimates suggested that 55–60% of Middle Eastern urea production was potentially halted or curtailed by infrastructure damage, constrained storage and the inability to export.

The direct loss of supply was amplified by higher energy, feedstock, shipping, financing and marine-insurance costs. The result was not simply more expensive fertiliser, but higher costs for its manufacture, financing, and delivery and, on some routes, the loss of commercially viable transport.

Lower urea prices do not demonstrate recovery

International urea prices have since fallen from their peaks. But this should not be mistaken for recovery from the Hormuz shock. Prices have eased amid partial supply recovery, released inventories and deferred purchasing, while uneven access to public support has enabled some buyers but not others to maintain demand. 

Industry estimates indicate that approximately 3.7 million tonnes of urea demand was destroyed or deferred between April and June 2026 as farmers and importers postponed purchases, reduced application or were priced out of the market. A falling price can therefore reflect returning supply, but it can also reflect buyers leaving the market. 

If prices remain moderate because fertiliser use has fallen, apparent market stability will have been achieved partly through lower future agricultural production. The consequences will emerge with a lag: decisions made during one purchasing window may become visible only in subsequent harvests, food prices and nutrition outcomes. 

Real recovery depends on action in the next planting cycles

Fertiliser purchasing is expected to strengthen from September onwards. Whether this produces another price rise will depend on the reliability of Gulf shipping, national export policies, accumulated inventories and the pace of production recovery. A renewed price spike is therefore a material risk, not an inevitable forecast. 

Crucially, the case for action does not depend on another spike occurring. The relevant test is not the international urea benchmark alone, but whether physical supply, farm-level affordability and normal fertiliser application recover before critical purchasing and planting windows close. 

The ICC-commissioned modelling by researchers at the University of Edinburgh, the University of Aberdeen and Scotland’s Rural College illustrates the potential consequences if fertiliser, transport and other energy-exposed production costs remain elevated. The early-stage, non-peer-reviewed study tests stylised scenarios rather than forecasting the observed consequences of the closure.  

The study finds that: 

• Under higher-severity scenarios in which input costs triple in 2026, nitrogen-fertiliser use could fall by approximately 37% and cereal productivity by up to 10% within a year, relative to a no-shock baseline. 
• At their modelled peaks, commodity prices could rise by up to 81% for cereals, 66% for oil crops and 30% for animal products, while consumer food-price increases could approach 70% in East Asia and the Pacific and Sub-Saharan Africa. 
• Even where modelled input costs progressively return to baseline over five years, an additional seven to 16 million people could be in the underweight BMI category in 2030. More than 90% of this additional burden would fall in South Asia, Sub-Saharan Africa, and East Asia and the Pacific. 

The consequences could therefore extend beyond food markets to public health, labour productivity and social stability. If benchmark prices normalise before these lagged effects become visible, political attention may fade precisely when support for farmers is most urgently needed. 

Six priorities for policy and industry action

Alongside the imperative for a cessation of hostilities in the Persian Gulf, ICC calls for coordinated action by governments, multilateral institutions and the private sector to keep essential agricultural inputs moving and protect future harvests. 

The policy brief recommends: 

1. Establishing durable governance arrangements for commercial navigation through the Strait of Hormuz. 
2. Providing clear regulatory and sanctions guidance to enable commercial transit. 
3. Establishing a contingent public-private insurance facility for eligible voyages. 
4. Mobilising coordinated finance for importers, distributors and farmers through the next two to three planting cycles. 
5. Preventing trade restrictions and regulatory uncertainty from amplifying the disruption. 
6. Establishing standing emergency-finance arrangements and strengthening resilience through more open and diversified markets, suppliers, routes and financing channels. 

Success should be measured not by the movement of a global price index, but by whether fertiliser reaches the farmers who need it, when they need it, to protect future harvests. 

Download the full policy brief to explore the evidence, scenario modelling and detailed recommendations for coordinated action. 

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The ICC-commissioned study “Geopolitical fertiliser and energy shocks threaten dietary health in vulnerable populations” is an early-stage research manuscript that has not yet been peer-reviewed or published in a journal. The version discussed here is available as a pre-print on SSRN, and its findings should be considered provisional.