Dr Fazal Ali

The Strait of Hor­muz is a nar­row wa­ter­way through which about 20 per cent of the world’s dai­ly LNG sup­ply tran­sits. Traf­fic has de­creased by ap­prox­i­mate­ly 70-90 per cent. Some ships are nav­i­gat­ing the pas­sage with spe­cial per­mis­sion, while oth­ers re­main an­chored.

Nat­ur­al gas is used to man­u­fac­ture ni­tro­gen-based ar­ti­fi­cial fer­tilis­ers. One third of fer­tilis­ers shipped by sea can­not ac­cess glob­al mar­kets, while the Strait of Hor­muz is ex­pe­ri­enc­ing a se­lec­tive block­ade. The block­ade is a choke point with sig­nif­i­cant po­ten­tial to de­crease crop pro­duc­tion and wors­en glob­al food in­se­cu­ri­ty.

Small Is­land De­vel­op­ing States (SIDS) have low re­silience to eco­nom­ic shocks due to lim­it­ed eco­nom­ic di­ver­si­fi­ca­tion and heavy re­liance on im­ports. Dur­ing this con­flict, SIDS can open dis­cus­sions on the use of AI-dri­ven fer­ti­ga­tion sys­tems that can au­to­mat­i­cal­ly ad­just nu­tri­ent lev­els, LED light­ing, CO2 lev­els, hu­mid­i­ty, and tem­per­a­tures in mod­ern AI-pow­ered grow­hous­es to re­duce re­source con­sump­tion and max­imise yields.

With fer­tilis­er pro­duc­tion halt­ed in Gulf coun­tries, the sup­ply of fer­tilis­ers pos­es a se­ri­ous threat to food in­fla­tion and food im­port costs. Be­fore the out­break of war on Feb­ru­ary 28, 2026, bench­mark glob­al urea fer­tilis­er prices were quot­ed around $470 to $490 per met­ric tonne. Fol­low­ing the es­ca­la­tion of the con­flict and the sub­se­quent dis­rup­tion of ship­ping through the Strait of Hor­muz, urea prices in­creased by ap­prox­i­mate­ly 30 per cent, with some re­ports in­di­cat­ing prices ex­ceed­ed $625/met­ric tonne short­ly af­ter the con­flict be­gan. Pre-war fer­tilis­er price high­lights in ear­ly 2026 show that urea (Mid­dle East/In­ter­na­tion­al) costs about $470–$490/met­ric tonne. Urea (NO­LA, U.S. Barge) reached $475/short ton. An­hy­drous Am­mo­nia was peak­ing at $895/tonne. DAP (Di­ammo­ni­um Phos­phate) was around $850/tonne, and Potash was $487/tonne.

The pre-con­flict mar­ket was al­ready ex­pe­ri­enc­ing tight­ness due to re­strict­ed ex­ports from Chi­na and re­duced out­put in Eu­rope stem­ming from high nat­ur­al gas prices and sanc­tions on Russ­ian gas.  In March 2026, fer­tilis­er prices in the Unit­ed States rose from $516 per met­ric tonne to $683. 

Gulf coun­tries ac­count for ap­prox­i­mate­ly 50 per cent of the sul­phur sold world­wide and a third of the urea, the most wide­ly trad­ed fer­tilis­er. They al­so pro­duce a quar­ter of the glob­al am­mo­nia trad­ed, a vi­tal feed­stock for fer­tilis­er man­u­fac­tur­ing. Brazil im­ports most of its urea from Qatar and Iran.

Qatar al­so ex­ports urea to Mex­i­co and Turkey. Asia im­ports ap­prox­i­mate­ly 64 per cent of its am­mo­nia and over 50 per cent of its phos­pho­rus and sul­phur from Gulf coun­tries.

The block­ade of the Strait has caused in­sur­ance pre­mi­ums to soar. War risk pre­mi­ums in­creased from ap­prox­i­mate­ly 0.25 per cent of a ship’s val­ue in ear­ly Feb­ru­ary 2026 to as much as 1 to 3 per cent for a sin­gle tran­sit, qua­dru­pling in some in­stances. Salaries and ben­e­fits for crews on tankers cross­ing the Strait have risen con­sid­er­ably due to height­ened se­cu­ri­ty risks, as the area is des­ig­nat­ed a high-risk zone, en­ti­tling crews to bonus­es and ad­di­tion­al com­pen­sa­tion.

Fol­low­ing in­creased geopo­lit­i­cal ten­sions, in­clud­ing drone at­tacks and ves­sel seizures, the In­ter­na­tion­al Bar­gain­ing Fo­rum (IBF) and the In­ter­na­tion­al Trans­port Work­ers’ Fed­er­a­tion (ITF) in­tro­duced, as of March 2026, mea­sures for sea­far­ers in the re­gion that in­clude a salary bonus equal to 100 per cent of their ba­sic wage or dou­ble pay for a min­i­mum of five days, or the ac­tu­al du­ra­tion of the tran­sit, while in the des­ig­nat­ed “War­like Op­er­a­tions Area”.

Death and dis­abil­i­ty com­pen­sa­tion are now dou­bled. Crew mem­bers al­so have the right to refuse en­try to the area, with the op­tion of repa­tri­a­tion at the com­pa­ny’s ex­pense and with com­pen­sa­tion. Mo­roc­co is a ma­jor sup­pli­er of phos­pho­rus-based ar­ti­fi­cial fer­tilis­ers to Eu­rope, but it re­lies on the Gulf for the sul­phur used in its fer­tilis­er fac­to­ries.

The EU im­ports about 26 per cent of its urea from Egypt, but Egypt has ex­pe­ri­enced dis­rup­tions in nat­ur­al gas sup­plies from Is­rael. Egypt­ian urea has in­creased from $500/tonne at the start of the war to $650/tonne. Eco­nom­ic de­pen­den­cy is not a vi­able long-term eco­nom­ic op­tion for de­vel­op­ing na­tions. The block­ade mo­ti­vates farm­ers in emerg­ing economies to re­duce over­re­liance on ar­ti­fi­cial fer­tilis­ers and adopt pre­ci­sion agri­cul­ture tech­niques.

AI-dri­ven sys­tems that use vari­able-rate tech­nol­o­gy com­bine GPS-guid­ed ma­chin­ery with soil health da­ta to ap­ply tai­lored amounts of fer­tilis­ers to mi­cro-zones. Com­put­er vi­sion and IoT leaf sen­sors can as­sess plant health in re­al time, de­tect­ing nu­tri­ent de­fi­cien­cies through tar­get­ed ap­pli­ca­tions. AI mod­els can now analyse his­tor­i­cal and re­al-time soil sen­sor da­ta to fore­cast fu­ture ni­tro­gen lev­els, help­ing to re­duce over-fer­til­i­sa­tion.

AI can be used to de­tect pest out­breaks and dis­eases ear­ly, en­abling tar­get­ed in­ter­ven­tions in spe­cif­ic ar­eas with min­i­mal in­puts and avoid­ing blan­ket chem­i­cal spray­ing.

Al­go­rithms can analyse cli­mate da­ta, crop growth stages, and soil con­di­tions to rec­om­mend the pre­cise, op­ti­mal time for fer­til­i­sa­tion, and re­duce runoff in­to drainage sys­tems. See-and-spray ro­bots can iden­ti­fy weeds, en­abling pre­cise chem­i­cal ap­pli­ca­tion.

Dr Fazal Ali com­plet­ed his Mas­ter's in Phi­los­o­phy at the Uni­ver­si­ty of the West In­dies. He was a Com­mon­wealth Schol­ar who at­tend­ed the Uni­ver­si­ty of Cam­bridge, Hugh­es Hall, the provost of the Uni­ver­si­ty of Trinidad and To­ba­go and the act­ing pres­i­dent, and chair­man of the Teach­ing Ser­vice Com­mis­sion. He is present­ly a con­sul­tant with the IDB.