The conflict in the Middle East is threatening to disrupt a major fertilizer production and shipping hub, raising the risk of higher crop costs and food inflation. The Gulf region is home to some of the world's largest fertilizer production plants, and the Strait of Hormuz handles about one-third of the global trade for the nutrients.

Prices were already high before the latest conflict erupted, and the fresh tensions come as Northern Hemisphere farmers are set to start applying the products to their fields. Qatar shut down liquefied natural gas production at the world's largest export facility after it was targeted in an Iranian drone attack. Qatar is a source of some 11% of the global urea exports, according to Bloomberg Intelligence.

Fertilizer producers saw their share prices soar on Monday, with Yara International rallying to a three-year high in intraday trade. Shares in CF Industries Holdings Inc. jumped as much as 8.3% to the highest price since December 2022, while Mosaic Co. was up as much as 4.2%. Nutrien Ltd. shares also rose. The broader S&P Composite 1500 Fertilizers and Agricultural Chemicals Index reached the highest level since July 2025.