The Strait of Hormuz may technically remain open, but fertilizer and other commodities are not moving through the region normally.

Renewed tensions in the Middle East have sharply reduced commercial vessel traffic through the narrow shipping lane connecting the Persian Gulf to the Gulf of Oman. AgWeb reported that only six commercial vessels crossed the strait on Sunday, the lowest number in five weeks, and that each vessel traveled with its Automatic Identification System turned off.

The larger concern for fertilizer markets is not only whether loaded ships can leave the Persian Gulf. It is whether vessel owners are willing to send empty ships back into the region to load the next round of fertilizer exports.

Without those returning vessels, export activity could slow even if the strait is never formally closed.

Fertilizer Prices Are Already Responding

The uncertainty has reversed part of what had been a significant decline in nitrogen fertilizer prices.

According to Josh Linville, vice president of fertilizer at StoneX, New Orleans urea barges traded as high as approximately $782 per ton earlier this year before falling to around $340. Prices have since rebounded to approximately $400 as concerns surrounding the Strait of Hormuz returned.

Although many U.S. producers use anhydrous ammonia or UAN rather than urea, the nitrogen markets remain connected. If urea becomes more expensive or difficult to source, buyers may shift toward other nitrogen products, increasing demand and potentially placing additional pressure on their prices.

Summer fill prices for anhydrous ammonia and UAN remain below the highs experienced this spring, giving some retailers an opportunity to rebuild inventory ahead of fall. However, continued instability could quickly change that outlook.

The risk extends beyond fertilizer itself. The Strait of Hormuz is one of the world’s most important energy shipping routes, carrying the equivalent of approximately 20% of global petroleum liquids consumption during the first half of 2025. Disruptions can increase energy, freight, insurance, and fertilizer costs throughout interconnected global markets.

What This Could Mean for Agricultural Claims

For agricultural insurance and claims professionals, fertilizer price volatility may create several important considerations.

Inventory and Replacement Values

Fertilizer held by agricultural retailers, cooperatives, commercial operations, or producers may carry a significantly different value than it did when originally purchased.

Following a covered property loss, claims professionals may need to carefully review purchase invoices, inventory records, quantities on hand, current replacement pricing, valuation provisions, and the date used to determine the value of the damaged product.

Business Interruption and Additional Expenses

When a covered physical loss affects a fertilizer retailer, cooperative, storage facility, or agricultural operation, limited availability and longer sourcing times could complicate recovery.

Depending on the policy and circumstances, higher freight costs, alternative sourcing, delayed replacement inventory, or extended interruptions may become relevant when evaluating business income and extra expense components.

Market disruption or higher prices alone do not establish coverage. The covered cause of loss, policy language, valuation method, period of restoration, and supporting documentation remain essential.

Application Decisions and Crop Liability

Higher prices or limited availability may also influence the type, quantity, and timing of fertilizer applied to a crop.

Producers may substitute one nitrogen product for another, reduce application rates, delay an application, or change their broader crop management plan. If a crop later experiences reduced performance or becomes part of an agronomic or crop liability dispute, those decisions may need to be understood during the investigation.

Useful documentation could include:

• Fertilizer purchase records and invoices
• Product labels and nutrient analyses
• Application dates, rates, and field locations
• Records of delayed or canceled deliveries
• Communications with retailers, agronomists, and applicators
• Documentation explaining product substitutions or changes in application plans

Clear records can help claims professionals distinguish between insured damage, application-related concerns, market-driven management decisions, and other factors that may have contributed to a loss.

Concerns Extend Into 2027

The fertilizer industry typically uses the lower-demand summer period to rebuild supplies and prepare for fall purchasing. Continued disruption could reduce the time available to move product and position inventory before demand increases.

Other global pressures are also affecting the market. China continues to create uncertainty through restrictions and changing export policies, while European nitrogen production remains below typical levels. These factors leave fertilizer markets especially sensitive to renewed shipping problems in the Persian Gulf.

For farmers already facing tight margins and weak grain prices, another increase in fertilizer costs could make fall purchasing and 2027 production decisions even more difficult.

For claims professionals, this is an important reminder that global supply disruptions can eventually reach agricultural losses through changing inventory values, longer replacement timelines, higher operating costs, altered crop-management decisions, and increasingly detailed documentation needs.

Source: Tyne Morgan, AgWeb, “The Strait of Hormuz Is Technically Still Open. So Why Are Fertilizer Prices Climbing?” Published July 14, 2026.