Closure of the Strait of Hormuz causes urea, diesel prices to spike as planting season begins in Arkansas
March 4, 2026
By Mary Hightower
University of Arkansas System Division of Agriculture
Fast Facts
- Corn planting underway in southern Arkansas
- Stiles: “This is happening at the worst possible time.”
- Enterprise budgets getting updated this week
(734 words)
Download file photo of Stiles, related chart
JONESBORO, Ark. — As war shuts down shipping in the Strait of Hormuz, farmers are seeing spikes in urea and diesel prices just as planting season has begun in Arkansas.
The conflict has stranded more than 200 vessels, according to Lloyd’s List, and prompted insurance companies to issue notices of cancellation for shippers working the Persian Gulf, according to gCaptain, a maritime news outlet
Scott Stiles, extension economics program associate for the University of Arkansas System Division of Agriculture, said about 30 percent of the world’s urea — a widely used fertilizer — goes through the Strait of Hormuz.
Each week, he conducts a price survey among urea dealers. The urea market’s reaction to the Iran conflict was “sharp and swift.”
“Prices went up $70 a ton on Monday,” Stiles said on Tuesday. “Most of them were quoting in the upper $500s per ton last week.
“I called a place on Monday, and they quoted me $640 per ton. I called the place back Tuesday morning, and they said $700 per ton,” he said.
On Tuesday, Stiles said he talked to an Arkansas farmer who reported being unable to get a quote after calling three dealers.
“Things are so volatile we don't really know where we are on the price curve and how far this is going to go,” Stiles said.
The situation is particularly dire for farmers who did not purchase urea earlier this season.
“Considering the economic situation row crop farmers were already facing, a lot of people were either waiting to see if they got financed or they needed an operating note for cash flow. For some, that delayed their decisions about booking urea,” Stiles said. “This is happening at the worst possible time. By that, I mean margins were thin to non-existent already going into the ’26 crop year.”
Stiles said that the prices of other fertilizers like potash and phosphates haven’t moved much.
Diesel and budget updates
Oil markets also have been rocked by the war in Iran, as a key producer shut down liquified natural gas production and one of the gulf’s largest oil refineries also shut down, sending gas and diesel prices upward.
“When we published the enterprise budgets in November, we put in a price of $2.46, and now we're a full dollar a gallon above that,” Stiles said. “Effectively, more than 40 percent has been added to our fuel cost in just the last few days.”
Each year, the Cooperative Extension Service develops enterprise budgets to help producers calculate their cost to farm. The budgets include inputs such as fertilizers and fuel.
Breana Watkins, an agricultural economics instructor for the Division of Agriculture, said she was working with colleagues to incorporate the wartime numbers.
“This won’t be a change to the budgets, but a bonus update with current spot prices,” Watkins said. “We’ll also have an update on commodity prices to reflect changes from the fall.”
Watkins said the goal was to have the updates ready by Friday.
As soon as the energy markets resumed trading Sunday night, prices spiked higher. The lead month April contract for NYMEX, the New York Mercantile Exchange, diesel futures closed last Friday at $2.5960 per gallon, Stiles said. It settled Tuesday at $3.1869.
“When you go out to the more deferred contracts, like the May and June, you do see diesel prices come down below $3.00,” Stiles said. “At least for now, the futures market sees the situation being a little calmer by the time we get out into May and beyond.”
Following the Russian invasion of Ukraine in February 2022, NYMEX diesel reached its peak for the year in April at $5.22 per gallon.
“Fortunately, that was the only month we saw diesel prices above $5 that year,” Stiles said. “As supply chains adjusted and production ramped up, fuel prices generally trended lower into harvest. A similar thing happened with urea prices in 2022. Prices spiked higher in early March and stayed at historically high levels until early April before starting to trend lower.
On Tuesday, President Trump said in a Truth Social post that he had ordered the United States Development Finance Corporation “to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy,” for shipping through the Persian Gulf.
The president also said that, if necessary, the U.S. Navy would begin escorting tankers through the Strait of Hormuz.
To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit uaex.uada.edu. Follow us on Facebook and Instagram. To learn more about the Division of Agriculture, visit uada.edu. To learn more about ag and food research in Arkansas, visit the Arkansas Agricultural Experiment Station at aaes.uada.edu.
About the Division of Agriculture
The University of Arkansas System Division of Agriculture’s mission is to strengthen agriculture, communities, and families by connecting trusted research to the adoption of best practices. Through the Agricultural Experiment Station and the Cooperative Extension Service, the Division of Agriculture conducts research and extension work within the nation’s historic land-grant education system.
The Division of Agriculture is one of 20 entities within the University of Arkansas System. It has offices in all 75 counties in Arkansas and faculty on three campuses.
Pursuant to 7 CFR § 15.3, the University of Arkansas System Division of Agriculture offers all its Extension and Research programs and services (including employment) without regard to race, color, sex, national origin, religion, age, disability, marital or veteran status, genetic information, sexual preference, pregnancy or any other legally protected status, and is an equal opportunity institution.
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