Corporate news
The Iranian War and Urea Prices
Urea prices are expected to continue rising amid the ongoing Iranian war for the following reasons:
1. Iran is one of the world’s largest urea exporters (4–6 million tons annually). The continuation of the war is likely to reduce global urea supply.
2. The potential closure of the Strait of Hormuz — through which approximately 20% of global LNG trade passes — would further disrupt energy markets. Qatar, in particular, relies heavily on the strait for LNG exports. Any closure would constrain gas supplies and push natural gas prices higher.
these factors would drive urea prices upward. While higher urea prices would typically benefit nitrogen fertilizer producers, reduced natural gas supplies present a significant challenge.
The suspension of gas flows to Egypt from the Leviathan field, along with potential disruptions to Qatari LNG exports due to a Strait of Hormuz closure, could create gas shortages. This may outweigh the benefits of higher urea prices and expose nitrogen fertilizer producers to the risk of partial plant shutdowns — similar to what occurred in May 2025, when several companies announced production cuts due to insufficient gas supplies.
We believe that nitrogen fertilizer companies (which are highly gas-intensive), including Abu Qir, Mopco, KIMA, and Valmor, could face gas supply challenges if the Iranian war continues and the Strait of Hormuz is closed. The impact may become more visible in the second half of the year. However, the government has announced precautionary measures aimed at preventing short-term gas shortages for fertilizer producers.
The first-quarter results of these companies are unlikely to reflect this impact due to the following factors:
1. Higher urea prices.
2. Following the liberalization of gas prices supplied to factories, the government implemented several supportive measures:
• Reduced the domestic market quota from 55% to 35%.
• Increased export quotas for fertilizer producers to 53–57% of total production, up from 43–45% previously.
• Provided EGP 1,500 per ton in local fertilizer subsidies, raising local prices from EGP 4,500 to EGP 6,000 per ton.
• Ensured the availability of natural gas in the short term.
Walaa Mosalam – Prime Research
WMosalam@egy.primegroup.org