Urea's Gulf squeeze has eased, but the acreage hit is locked in

Urea-laden vessel traffic in the Middle East Gulf hit a record high during the Strait of Hormuz disruption, then unwound fast once the strait reopened. Prices have since eased down from four-year high but the spike landed at planting time. Wheat in Australia, corn in the US and other summer crops globally have suffered acreage reduction as a result.

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A record Gulf vessel backlog builds, then unwinds within weeks

Around 40% of global seaborne urea trade moves through the Strait of Hormuz, most of it produced in the Gulf states and Iran, where cheap gas underpins the region's energy-intensive urea output. When the Strait's disruption began in March 2026, cargoes kept loading but could not transit, and the number of urea-laden vessels waiting within the Middle East Gulf climbed from a typical 2-6 a week to a record high by mid-May, 4 to 5 times the usual level and a historical high for the region.

The backlog held near its peak for around 6 weeks before unwinding sharply once the strait reopened, in line with the wider fleet exodus from the Gulf as loaded cargoes finally moved.

Urea-laden vessel traffic in the Gulf hits a record 25 vessels before unwinding (vessel count)

Source: Kpler

Urea prices spiked alongside the backlog, but there were no new curbs from other exporters

Urea prices rose sharply over the same period, climbing from a subdued start in January 2026 to a level not seen since the 2022 energy crisis by April, before easing back in May.

Unlike sulphur, where several exporters layered on new restrictions, other major nitrogen suppliers left urea trade largely untouched. Russia suspended ammonium nitrate exports for a month, then returned to a quota system from 22 April 2026. Global urea supply outside the Gulf did not tighten further.