Hormuz Sulfur Shortage Puts Global Fertilizer Supply Under Pressure

The disruption of shipping through the Strait of Hormuz has turned sulfur, a little-known by-product of oil and gas refining, into one of the most strained commodities of 2026. Prices have climbed to levels rarely seen in decades, and the shock is now spreading through two strategic industries at once: phosphate fertilizer production and metal smelting. Morocco's OCP Group, the world's largest exporter of phosphate fertilizers, sits at the center of this crisis.

Sulfur is recovered when refineries and gas plants remove it from crude oil and natural gas. It is then burned to produce sulfuric acid, which is essential to dissolve phosphate rock and make fertilizers such as DAP, MAP and TSP. The same acid is also widely used to extract copper and nickel. Because supply depends on oil and gas processing rather than on demand, producers cannot simply increase output when a shortage appears.

The crisis began when the traffic through the Strait of Hormuz collapsed. Before the conflict, close to half of the world's seaborne sulfur trade passed through this waterway, mostly from Qatar, the United Arab Emirates, Kuwait and Saudi Arabia. Within days, loaded bulk carriers were stuck inside the Gulf, and analysts estimated that close to one million tonnes of sulfur were waiting to leave the region in the spring.

Morocco was directly exposed. The Middle East supplied about 52% of the country's sulfur imports in 2025, and OCP relies on imported sulfur to run its huge chemical complexes at Jorf Lasfar and Safi, which process rock extracted from mines such as Khouribga. On April 2, OCP announced that it was bringing forward scheduled maintenance, a move expected to affect up to 30% of its production capacity in the second quarter. The company did not cite sulfur explicitly, but market observers linked the decision to tight raw material supply.

Prices rose quickly. Middle East sulfur was already expensive at around $520 per tonne in February, compared with a more typical range of $100 to $200 per tonne in normal years. By early May, delivered prices in the Mediterranean reached a record of about $920 to $940 per tonne, and later spot deals moved above $1,000 per tonne. Recent reports describing an increase of nearly ten times refer to this normal range, while the rise since the start of 2026 is closer to a doubling.

The pressure on fertilizer makers grew as other suppliers pulled back. Russia extended its ban on industrial sulfur exports until December 31, 2026, India suspended sulfur exports and China stopped exporting sulfuric acid in May. In the United States, Mosaic said in May that it would reduce phosphate output in both the US and Brazil because of high prices and limited sulfur availability. Producers in Saudi Arabia were also reported to have cut production sharply.

OCP first cushioned the impact with stocks bought before the price spike, which covered its needs until the end of July 2026. The group then changed its product mix. In June, it announced a return to full production while sharply increasing its output of TSP, a phosphate fertilizer that needs much less sulfur and no ammonia. TSP reached about 65% of the fertilizer volumes of its commercial arm at that time. OCP has also explored new sulfur sources in Canada and Iraq, the use of pyrite, and the recovery of sulfur from its own industrial residues.

The situation worsened again in mid-July, when hostilities resumed and sulfur shipments through the strait fell back to almost zero. OCP has warned that the Hormuz crisis has become a wider fertilizer supply shock and that it cannot fully replace lost Gulf supply because sulfur remains scarce. The company also said that the higher costs are hard to pass on to farmers, who are already struggling to afford fertilizers.

On September 30, OCP published first-half results that showed the scale of the damage. EBITDA fell by 28.5% as sulfur costs roughly tripled while fertilizer prices increased by only about 20%. OCP estimated that global trade in phosphate fertilizers dropped by around 22% in the first half of 2026, while Moroccan shipments fell by 16%. TSP accounted for 35% of its fertilizer exports, up from 26% a year earlier, and Morocco's share of world phosphate fertilizer trade rose to about 30%.

In September and early October, sulfur prices started to ease slightly as buyers resisted record costs and Canadian cargoes reached Morocco, Brazil and Indonesia. Several cargoes from Kazakhstan were also shipped to Morocco. Middle East producers cut their October contract prices, with Qatar at $835 per tonne, Kuwait at $820 per tonne and Abu Dhabi at $890 per tonne, down $45 to $70 from September. However, prices remain far above last year's levels, and fertilizer makers still face deeply negative margins on some products.

The outlook has darkened again in October. Attacks on merchant ships in and around the Strait of Hormuz have become almost daily, and two cargo ships sank after being hit by projectiles on October 13 and 14. Kpler data showed that oil flows through the strait fell to less than a quarter of pre-war levels on October 12. Kpler analysts consider that the sulfur trade crisis has not eased and could deteriorate further while vessels remain blocked.

The effects reach far beyond Morocco. Higher sulfur and sulfuric acid costs raise the price of phosphate fertilizers for farmers in Brazil, India, Africa and the United States, where planting seasons depend on timely supply. Lower fertilizer use could reduce crop yields and add pressure on food prices. At the same time, copper and nickel producers that depend on sulfuric acid face higher processing costs, with possible effects on metals used in electronics and batteries.

The sulfur crisis shows how a single shipping lane can disrupt global food and industrial supply chains. As long as Gulf cargoes cannot move freely, sulfur prices are likely to stay high, and phosphate fertilizer supply will remain under strain heading into the 2027 planting season.