The easing of tensions in the Strait of Hormuz following a provisional US-Iran peace deal has led to a significant rebound in fertilizer exports shipped through the waterway since last week. According to media-compiled vessel tracking data and information from shipping intelligence firm Kpler, at least 16 vessels carrying fertilizer products have departed the Strait of Hormuz since the interim agreement was signed, with shipping volumes gradually approaching pre-conflict levels.

Of the more than 40 vessels trapped since the early stages of the conflict, at least 18 have now left, with most heading towards Asia. Kpler data shows that in the week ending June 21, fertilizer exports via the Strait of Hormuz recovered from near-zero levels during the conflict to approximately 530,000 tonnes. The firm's preliminary tracking for the current week indicates that fertilizer shipments continue to recover.

The resumption of fertilizer exports through the Strait of Hormuz is restoring supply from the Persian Gulf, home to one of the world's largest fertilizer production hubs. The strait is a critical and sole maritime chokepoint for Middle Eastern fertilizer exports, handling about 30% of global seaborne fertilizer trade. The previous conflict had caused a significant backlog of fertilizer cargoes in the Gulf, but global market supply is now gradually easing.

The agricultural sector has been closely monitoring the pace of vessel departures. Market expectations had been for a gradual resumption of shipping, as hundreds of vessels carrying various cargoes vie to exit the waterway, with fertilizer shipments potentially taking lower priority than crude oil and natural gas.

Destinations for these vessels include Asian nations such as China, India, and Sri Lanka. India is the world's largest importer of urea and diammonium phosphate. One vessel is also headed to Brazil, where buyers are building fertilizer inventories ahead of the soybean planting season, which begins around September.

"Some of the supply pressure should ease as shipments resume," said Pranshi Goyal, a senior analyst at consultancy CRU Group. While it may still take weeks for these cargoes to reach buyers, urea prices have already fallen sharply as fears of prolonged supply disruptions rapidly recede. Urea is one of the world's most important fertilizer products.

This situation, a stark reversal from the early days of the conflict, alleviates one of the major risks previously facing global food inflation. Furthermore, it is possible that additional fertilizer-laden vessels have already successfully left the Persian Gulf. Some vessels that were trapped there had not transmitted location signals for months, meaning they may have turned off their AIS satellite transponders before departure and have not yet reactivated them, suggesting the actual number of vessels that have transited the strait could be higher than current statistics indicate.

Prior to the fertilizer cargoes, as the US and Iran signaled progress in negotiations to end the conflict, an increasing number of oil tankers have been turning on their satellite signals to transit the critical Strait of Hormuz, indicating growing owner confidence. The International Maritime Organization also stated it has received security assurances, allowing hundreds of vessels to depart the Persian Gulf.