Why spike in fertiliser prices may boost China’s political clout amid Iran war shockwaves

The ongoing US-Israel conflict with Iran has triggered a major disruption in the global fertilizer market by effectively blocking the Strait of Hormuz, a critical shipping chokepoint. This has halted exports from major Gulf producers like Saudi Arabia and Qatar, causing the price of urea—the world's most common nitrogen fertilizer—to skyrocket from approximately $400 to $700 per tonne, a 75% increase. The timing is critical, as the first major planting season of the year is just months away for much of Asia, creating urgent demand and potential food security concerns.

This supply shock hands unprecedented strategic leverage to China, the planet's largest fertilizer producer. Southeast Asia is particularly vulnerable, with researchers noting that 80% of the region's fertilizer is imported, primarily from the Gulf. Major buyers like Indonesia, Vietnam, and the Philippines now face a scramble for supplies. Analysts suggest Beijing could use this leverage to bolster its political influence in ongoing regional disputes, though they deem an outright 'weaponization' of fertilizer exports as improbable. The situation underscores how geopolitical conflicts can rapidly reshape economic dependencies and power dynamics far beyond the immediate theater of war.