Middle East Crisis - Oil or something else?

Next time you hear about conflicts or gas pipe shutdowns in the middle east, remember, it’s not just about your car or electricity bill — it’s about the food on your plate, and millions of Indian farmers.

Whenever we talk about tensions in the Middle East, everyone immediately jumps to oil and logistical disturbances. But here's the twist — it's fertilizers that we need to start worrying about. And for India, it's a big deal.

Here's how it connects

The Middle East isn't just about oil; it’s also a fertilizer powerhouse, especially for nitrogen-based fertilizers like urea (made from natural gas).

Now with conflicts disrupting natural gas supply (especially after recent tensions involving Israel, Iran, and Egypt), fertilizer plants in the Middle East have shut down. That’s squeezed the global supply — and prices are already rising. (Refer Image)

We are the second-highest fertilizer consumer in the world. And for some more than half of it is imported. For some types — like potash - we import 100%!

Where do we get much of it from?  the Middle East. Whenever there’s a hiccup there, our supplies get squeezed, and prices skyrocket.

Countries like Iran, Saudi Arabia, Egypt, Oman — they're all big producers and exporters. "In 2023, India imported about 20-25% of its total fertilisers from Gulf countries....Among the three key fertilisers, India imports about 20% of its urea, around 60% of diammonium phosphate (DAP), and 100% of muriate of potash (MOP)." - The Indian Express

It's not just Middle east, we depend heavily on other Countries like China for speciality chemicals which has lately restricted exports.

But that’s not all. Farmers in India rely on government subsidies to keep fertilizer prices low. Fertilizer subsidy - 1.7 Lakh Crore - contributes 40% of our total subisidy budget (2024-2025 RBE), 2nd largest after Food Subsidy.
Out of this 1.7 Lakh Cr. - 1.2 Lakh Cr. pertains to Urea subsidy and 0.5 Lakh Cr. pertains to other Nutrient Based Subsidy.

Without these subsidies, the price of fertilizer would be three or four times higher for them.

The Oovt. of India is making continous effort to achieve self-sufficiency by reviving various plants and providing incentives - with an ambitious target of 0 urea imports by end of 2025.

When it comes to our nation's basic necessities being secured amid a geopolitical crisis - It’s as much about food on our plate as it is about fuel in our cars.