The conflict between Iran and Israel that began on June 13 could have significant impacts on commodity markets, including fertilizer markets. The key risk comes not just from the potential loss of production, but also and perhaps even more importantly from the potential loss of a key transportation route – the Strait of Hormuz - for producers in the Arabian Gulf region. The Strait of Hormuz, a narrow stretch of water between Oman and Iran, is the only transit route for a large amount of production for countries west of the Strait, including Saudi Arabia. Iran has a history of restricting or blocking ship traffic through the strait during times of conflict, which is making fertilizer and energy markets justifiably nervous.

 

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