Hormuz Disruption Highlights Supply-Chain Risk in Fertilizer Stocks

When conflict in the Middle East disrupted gas exports through the Strait of Hormuz in late February 2026, market attention focused on oil prices and shipping lanes. However, the impact extended through supply chains into unexpected corners of the global economy, including nitrogen-based fertilizer production, where natural gas is the primary raw material.

The disruption was not evenly distributed. Some fertilizer producers were significantly affected, while others saw limited impact. This divergence can be explained by differences in company-level supply chains — a risk that may be identified in advance.

Using MSCI GeoSpatial Asset Intelligence and MSCI supply-chain data, we modeled dependencies among nitrogen-based fertilizer producers. Importantly, we looked not only at direct supplier relationships but also indirect (tier 2) suppliers, a layer that is often difficult to trace but can materially affect input costs. We found a clear relationship between companies’ indirect supply-chain reliance on disrupted energy exports and their share-price performance.

CF Industries Holdings Inc. and Nutrien Ltd., with minimal reliance on Middle East energy supplies, outperformed during the period. Yara International ASA, also with relatively low exposure, posted gains even as European gas prices surged 70% in March 2026, as higher nitrogen prices offset increased input costs. By contrast, Indian producers, which rely heavily on liquefied natural gas imports from Qatar, faced government-imposed gas rationing, threatening production curtailment at a critical point in the agricultural calendar.¹

This analysis highlights how location-based risks can emerge from deep within supply chains. In this case, pressure stemmed not from revenue exposure, domicile or direct business relationships, but from indirect suppliers. Mapping these relationships may help investors identify vulnerabilities and assess risk ahead of future disruptions.