S&P Global Warns Hormuz Disruption Threatens Global Food Security
A new report from S&P Global warns that the energy crisis is worsening into a full-blown food security threat, driven by disruptions in the Strait of Hormuz and the broader war in Ukraine. The conflict has created a “multidirectional squeeze” on global agriculture, the report states, as rising fuel costs and shifting crop priorities threaten food production chains.
The Strait of Hormuz, a critical trade route, previously handled half of the world’s fertilizer feedstock exports before U.S. and Israeli military actions in February. Chemicals like urea, ammonia, and nitrogen, essential for nitrogen-based fertilizers, now face severe supply chain risks. Nearly half of the world’s calories depend on these fertilizers, particularly for staple crops like corn, wheat, and rice.
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Fertilizer prices have already doubled since the Strait’s near-shutdown in late February, and the United Nations estimated in April that disruptions could push 45 million more people into hunger, though the crisis persists six months later. After the Strait of Hormuz closed to nearly all shipping traffic on February 28, fertilizer prices surged enormously, rapidly doubling their previous levels. Even with partial reopening, fertilizer recovery will take months or years, as natural gas production in the Gulf remains constrained.
The International Monetary Fund projects fertilizer prices to rise 10% by year-end, driving 5% higher food costs in 2026 and 2.4% in 2027. Low-income nations, where food makes up half of household spending, will bear the brunt. The S&P Global report highlights how energy-price hikes, biofuel demand, and El Niño-related weather risks further strain food systems.
