Hormuz Fertilizer Blockade Sends Crop Prices to Three-Year High
A new UN report warns Hormuz-related fertilizer blockades have driven crop prices to three-year highs, as Houthis now threaten the Saudi Red Sea bypass.
A United Nations report published Friday (2026-07-24) warned that rising energy and fertilizer costs, driven by the US-Iran conflict and Russia's war in Ukraine, could push millions more people into acute food insecurity, extending the Hormuz disruption beyond crude oil markets into global food supply chains.5
Since the Strait of Hormuz effectively closed to shipping traffic, 3.9 million tonnes of urea exports have been stranded, representing about 30% of the region's annual fertilizer output, according to the UN assessment. Crop prices hit a three-year high around the time of publication, compounding damage from heat waves and contested Black Sea grain routes.5
ICE Brent crude front-month stood at $98.70 per barrel at Friday's close (2026-07-24), pulling back from the $100 level it touched on Thursday (2026-07-23), a near one-third rally from last month's lows, Tempo.co reported. Saxo Bank, citing Bloomberg data in the week of July 13 (2026-07-13), put the year-to-date crude move at 65%. Both Brent and WTI crude are up more than 50% over the twelve months to July, OilPrice.com reported.4,3
The supply shock has been accumulating since late February, when fighting between the US, Israel, and Iran escalated. The Strait of Hormuz carried about 20 million barrels per day before the conflict, roughly a fifth of global oil supply. Industry estimates suggest the cumulative shortfall has reached nearly 1 billion barrels since then, with each week of disruption removing roughly 100 million barrels from available supply, according to India Seatrade News.3,1
Saudi Arabia and the UAE responded by routing exports through the Red Sea and bypassing the Strait through overland pipelines. At its peak, the Red Sea corridor was carrying approximately 6.8 million barrels per day, about half the normal Strait of Hormuz volumes, according to Rystad Energy senior vice president Jorge Leon. Saudi Aramco targeted more than 5 million barrels per day through alternate routes to stabilize global supply.4,1
But on Monday (2026-07-20), Houthi forces declared a naval blockade on Saudi Arabia, directly targeting that Red Sea bypass. The move threatens more than 4 million barrels per day of Saudi crude that Riyadh had redirected from Hormuz, OilPrice.com reported. Before the escalation, around 2.5 million barrels of Saudi oil were transiting Bab el-Mandeb daily, according to Rystad's Leon. With Hormuz disrupted and the Red Sea now contested, Saudi exports face simultaneous pressure at both exit points.3,4
The UAE retains insulation the Saudis lack. Abu Dhabi's Habshan-Fujairah pipeline has been operating since 2012 and can carry up to 1.8 million barrels per day directly to the Gulf of Oman, clear of both chokepoints. ADNOC is accelerating an expansion to lift bypass capacity to between 3 million and 3.6 million barrels per day, Eastern Eye reported. The company was producing slightly above 3 million barrels per day before the conflict and is targeting 5 million barrels per day by 2027.2
The stranded fertilizer volumes explain the three-year high in crop prices. With 30% of the Gulf region's annual fertilizer exports effectively blockaded since the Strait closed, farm input costs have risen alongside fuel prices. The food inflation from this conflict moves on planting-season timelines, not trading sessions.5
Reuters has reported that some 7 million barrels per day pass through Bab el-Mandeb under normal conditions. Sustained Houthi interdiction would force those cargoes onto longer Cape of Good Hope diversions, adding freight costs and transit weeks to an already disrupted market. With ICE Brent front-month closing Friday (2026-07-24) just below $100, the near-term focus is whether Houthi enforcement of the Saudi blockade produces actual cargo diversions or remains a declared posture.3