Russian fertilizer makers can’t offset potential Iran-related supply crunch, sources say

Fertilizer producers in Russia, the world’s largest exporter, will not be able to make up for a potential global shortfall linked to the US-Iran conflict as their ability to boost supply is constrained, industry sources tell Reuters.

The war has shut down fertilizer plants in the Middle East and severely disrupted shipping routes via the Strait of Hormuz, a conduit for about a third of global trade in fertilizers.

Russia accounts for about one-fifth of global fertilizer trade, but limited capacity, domestic export caps and recent Ukrainian attacks on major plants all constrain its ability to ramp up output, the sources say.

New export-oriented plants are not expected to come on stream before 2027, according to one source, who spoke on condition of anonymity.

“Higher prices look great on paper, but Russian producers are boxed in by domestic supply obligations, especially ahead of the planting season,” says another industry source, who also spoke on condition of anonymity.

“And any windfall profits are likely to draw government attention as it looks for ways to boost budget revenues.”

A third source, also speaking on condition of anonymity, says companies are currently focused on meeting domestic demand.

“It may be possible to cover, over a short horizon, the demand left unmet without the Middle East, but in the long term, it is too large a volume to replace,” the source adds.