Four Months After the Strait of Hormuz Closure: Fertilizer Market Adjustment and a Revised Outlook

The March 2026 closure of the Strait of Hormuz disrupted a major corridor for global fertilizer trade and triggered a sharp but uneven market response. This white paper evaluates the first four months of adjustment, focusing on why urea prices retraced quickly while phosphate, ammonia, and UAN prices remained elevated. NOLA urea rose to about $710 per short ton in April before falling below pre-war levels by mid-June, reflecting a rapid repricing of prolonged-closure risk, China’s return to the export market, rerouting through Omani ports, and partial coverage of near-term buyer needs. By contrast, DAP, MAP, ammonia, and UAN remained above pre-war levels because sulfur availability, natural gas costs, and upstream feedstock pressures were not resolved by the reopening framework. Using updated mid-June prices, revised supply assumptions, and Kalshi-calibrated blockage schedules, the paper revises the SVAR-PE fertilizer outlook through 2028. The June update lowers projected 2027 prices relative to the April scenarios but still indicates possible firming from the mid-June urea trough and persistent cross-product divergence. Remaining risks center on effective reopening delays, Gulf infrastructure damage, China export policy, seasonal import demand in Brazil and India, and uncertainty around phosphate supply constraints.