Iran’s Ten-Point Hormuz Control Demand Keeps Global Agri-Food Trade in Limbo

Iran’s insistence on retaining control over the Strait of Hormuz and securing sweeping sanctions relief under its formal ten-point proposal signals that the effective closure of the waterway is unlikely to be resolved quickly. With vessel transits still down more than 90% despite a two-week ceasefire, agricultural commodity and fertiliser supply chains face extended disruption, elevated costs and persistent price volatility.

For grain, oilseed and livestock markets – particularly in import-dependent regions – the talks scheduled in Islamabad this weekend are unlikely to deliver a rapid normalisation of flows. Instead, traders are bracing for a protracted period of constrained logistics, high energy and nitrogen costs, and aggressive re-routing of cargoes away from the Gulf.

Introduction

The two-week ceasefire agreed on 7 April between the United States, Iran and Israel has paused direct hostilities but has not reopened the Strait of Hormuz, through which roughly 20–25% of global seaborne oil and about one-fifth of LNG normally pass. Maritime intelligence and UN trade monitoring indicate that shipping transits remain in single digits per day, a decline of over 95% from pre-war averages of around 100–140 ships.

Iran’s published ten-point settlement proposal demands continued and unchallenged authority over the Strait, international acceptance of its nuclear enrichment programme, and the lifting of all primary and secondary sanctions, alongside broader regional conditions. Washington, by contrast, has tied any durable deal to an unconditional reopening of Hormuz under international norms. The gap between these positions leaves a critical chokepoint for global energy, fertiliser and food trade effectively shut.

🌍 Immediate Market Impact

Oil and LNG flows through Hormuz have collapsed, driving Brent benchmarks above $120/bbl at points and sharply increasing fuel and freight costs for agricultural supply chains. Fertiliser shipments – especially urea, ammonia and sulphur originating from Gulf producers – have fallen by 90% or more, according to UN and regional industry estimates.

Higher energy and fertiliser costs are feeding through into food prices. The FAO reports a second consecutive monthly rise in global food prices in March, with particular strength in energy-intensive segments such as vegetable oils and sugar. Import-dependent countries in Africa, the Middle East and parts of Asia are already seeing widening affordability gaps as fertiliser and fuel costs surge.

📦 Supply Chain Disruptions

UNCTAD and commercial trackers report that daily ship transits through Hormuz are down to single digits, leaving more than 90% of pre-war volumes stranded or rerouted. Iran has imposed a de facto regime of regulated passage, with reports of tolls and mandatory IRGC coordination, while some accounts suggest a cap of around 15 vessels per day under the current ceasefire – far below the historical norm.

Fertiliser exports from Gulf producers – which account for roughly a third of global urea trade and about a quarter of ammonia exports – have been heavily curtailed, with some analyses estimating a 92% drop in March transit volumes versus February. Trade finance has tightened as banks reassess war-risk exposure, delaying letters of credit and complicating forward coverage for fertiliser and food cargoes.

European gas and power benchmarks have roughly doubled from pre-war levels, squeezing nitrogen producers and downstream processors. Some EU-based ammonia and nitrate plants are again curbing output, while buyers in Brazil, India and other key import markets face higher replacement costs and longer lead times as vessels divert around the Cape of Good Hope.

📊 Commodities Potentially Affected

• Urea and nitrogen fertilisers – Gulf exporters account for around 34% of global urea and about 23% of ammonia trade; disrupted flows and high gas prices are lifting nitrogen benchmarks and tightening availability.
• Phosphate and potash-based fertilisers – While less directly dependent on Hormuz, production and shipping costs are rising due to higher energy, sulphur and freight costs, with analysts warning of price rises of 50% for some phosphate products.
• Grains and oilseeds – Higher fertiliser and fuel costs, plus potential application cuts, risk lower yields and higher production costs in major exporting regions, pressuring wheat, maize and soybean margins and futures.
• Animal feed (maize, soymeal) and livestock products – Rising feed and fertiliser prices are increasing production costs and weighing on meat and dairy sectors, with documented pressure on EU pork and poultry margins.
• Vegetable oils and sugar – Energy-driven cost inflation and logistics bottlenecks are already visible in higher prices for palm oil, other vegetable oils and sugar, magnifying input costs for food processors.
• Sulphur and industrial inputs – The near-halt in Gulf sulphur exports – roughly 45% of global trade – has knock-on effects for fertiliser manufacture and certain industrial chemicals.

🌎 Regional Trade Implications

Asia – especially India and parts of Southeast Asia – is highly exposed, sourcing over a third of urea, more than half of sulphur and nearly two-thirds of ammonia imports from Middle Eastern suppliers. Africa faces delayed but severe effects as fertiliser shortages filter through into lower yields and tighter export surpluses from key grain suppliers, pushing up food import bills months down the line.

Europe’s direct fertiliser volume exposure to Hormuz is more limited, but it is highly sensitive to price due to its dependence on imported gas and ammonia. Russia and other non-Gulf exporters are in a position to capture premium markets for oil, fertiliser and some grains, as buyers seek alternative suppliers to backfill disrupted Middle Eastern flows.

Gulf Cooperation Council states themselves, which import 70–90% of their food requirements via Hormuz, are simultaneously constrained exporters of energy and fertiliser and vulnerable food importers, creating a pronounced regional food security challenge.

🧭 Market Outlook

In the near term, markets will focus on this weekend’s Islamabad talks, which bring US Vice President JD Vance and senior Iranian officials together under Pakistani mediation. Even a limited framework that modestly increases safe daily transits could ease some freight and insurance pressure, but the current Iranian stance on permanent control, tolls and sanctions relief argues against a rapid return to normal throughput.

Short term, volatility in energy, fertiliser and related agri-commodity markets is likely to remain elevated, with further upside risk if diplomacy stalls or if Lebanon-related escalation disrupts sentiment further. Medium-term price direction will hinge on whether a commercially workable transit regime – acceptable to shipowners, insurers and major buyers – can be agreed without resolving all political disputes.

CMB Market Insight

Iran’s ten-point proposal moves the Hormuz dispute from a purely military risk into a structural governance question for a critical maritime chokepoint. For agricultural commodity markets, this elevates the probability that higher energy, freight and fertiliser costs will persist into at least the next planting cycle in several key producing regions.

Traders, importers and food processors should prepare for prolonged risk management around Middle Eastern exposures: diversifying sourcing where feasible, reassessing basis and freight assumptions in forward contracts, and stress-testing margins against sustained fertiliser and fuel price strength. Until a credible, enforceable transit framework for Hormuz is in place, global agri-food and fertiliser markets will remain in a regime of structurally higher logistics risk and price volatility.