In the early hours of the morning of the 3 January 2026 the US launched a precision strike on Venezuela and captured the country’s President, Nicolás Maduro. Since then the US has made its intentions to help manage the future of Venezuela clear, while much of the conversation has been around the future of the nation’s oil reserves little media attention has focused on the impact on the nations urea exports. Yet urea is a critical resource like any other.
When news broke of the US operation, the market responded with an increase in the cost of shipping urea from Venezuela as vessel owners sought war-risk premiums.1 While the situation did stabilise after the brief price hike – which was building on weeks of increasing freight rates for loading urea in Venezuela – the US’s actions rekindled market attention on potential geopolitical impacts on the global fertilizer supply chain, especially nitrogen fertilizers.2 In the grand scheme of things Venezuela is not a major global player in the urea market, only exporting 400 000 t in 2025. What is a more important takeaway is how these events showcase potential vulnerabilities in the urea export market.
Urea is one of the most widely used and highly demanded nitrogen fertilizers. This is due to its 46% nitrogen content which can boost plant growth, leading to improved crop yields and better quality produce. Yet the production process for urea involves lots of natural gas and therefore the price of urea can often be highly susceptible to changes in the price of natural gas, which itself can often be affected by regional instability. In 2025 Egypt, a major exporter and producer of urea, halted production on 13 June after Israel ceased pipeline exports of natural gas.3 Furthermore, the production process for urea requires production facilities to store a large amount of natural gas on site which presents an explosive hazard risk. Such risks were on full display when production in Iran was halted in June 2025 after drone strikes damaged two natural gas facilities which led to urea producers in the region emptying their ammonia tanks to reduce the risk of massive explosions in case these plants were also targeted.3 For a country that exports 4.5 million tpy and produces almost 9 million tpy a halt in production would inevitably result in significant lost revenue as well as send waves through the international market.
Ultimately, what incidents like these and events in Venezuela show is that urea is a product who’s price, supply, and demand is subject to geopolitical unrest, regional upheavals, and the supply of key resources required for the production process.
Yet every day work is being done to increase the global supply of urea and while established producers like Russia, China, and Iran may face economic sanctions that limit their ability to trade – which has somewhat constricted the global supply – there are other countries planning to expand their market presence. One such nation is Australia, which is seeking to capitalise on ongoing changes in the industry. Read more about it on page 36 of this issue as Perdaman analyses how the global urea and melamine industries are changing and why this creates an opportunity for Australia.
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