The measure comes as fertilizer prices have surged worldwide after the near-total closure of the Strait of Hormuz, a critical maritime corridor along Iran’s coast that handles roughly one-third of global fertilizer trade. The disruption has intensified competition for alternative supplies and raised concerns over food production and agricultural costs.

The Council said the temporary tariff suspension would apply to major nitrogen-based fertilizer products but would exclude imports originating from Russia and Belarus.

Although the EU has limited direct dependence on Middle Eastern fertilizer supplies, officials said market-wide price increases have affected fertilizer availability and affordability across the bloc. The move is intended to ease pressure on farmers facing higher production costs during a period of heightened volatility in global agricultural markets.

The Council noted that a significant share of EU fertilizer imports already enters duty-free under preferential trade arrangements. However, substantial volumes continue to face customs duties ranging between 5.5% and 6.5%.

To protect European producers while expanding supply, the tariff waiver will be capped through a quota mechanism. Eligible imports will be limited to the volume of most-favored-nation imports recorded in 2024, plus an additional amount equivalent to 20% of fertilizer volumes imported from Russia and Belarus during the same year, the Council said.

The measures are expected to take effect within days after publication in the EU’s Official Journal.

The decision follows warnings from the United Nations Food and Agriculture Organization that a prolonged disruption of shipping through Hormuz could trigger severe consequences for global food systems by constraining access to fertilizers and raising production costs for farmers.

Early signs of strain are already emerging in agricultural markets. Australia, the world’s third-largest wheat exporter, is planting fewer crops this season amid elevated fertilizer costs, raising the risk of a substantially smaller harvest.

Across parts of Asia, rice production is also expected to decline this year as the conflict compounds weather-related challenges associated with an emerging El Niño pattern.

According to the Council, the EU imported 2 million metric tons of ammonia and 5.9 million metric tons of urea in 2024, alongside 6.7 million metric tons of nitrogen-based fertilizers and nitrogen-containing mixtures.

The European Commission estimates the bloc’s direct reliance on Middle Eastern supplies remains relatively limited, accounting for about 3% of ammonia imports and between 1% and 2% of nitrogen fertilizer imports.

The measure comes as fertilizer prices have surged worldwide after the near-total closure of the Strait of Hormuz, a critical maritime corridor along Iran’s coast that handles roughly one-third of global fertilizer trade. The disruption has intensified competition for alternative supplies and raised concerns over food production and agricultural costs.

The Council said the temporary tariff suspension would apply to major nitrogen-based fertilizer products but would exclude imports originating from Russia and Belarus.

Although the EU has limited direct dependence on Middle Eastern fertilizer supplies, officials said market-wide price increases have affected fertilizer availability and affordability across the bloc. The move is intended to ease pressure on farmers facing higher production costs during a period of heightened volatility in global agricultural markets.

The Council noted that a significant share of EU fertilizer imports already enters duty-free under preferential trade arrangements. However, substantial volumes continue to face customs duties ranging between 5.5% and 6.5%.

To protect European producers while expanding supply, the tariff waiver will be capped through a quota mechanism. Eligible imports will be limited to the volume of most-favored-nation imports recorded in 2024, plus an additional amount equivalent to 20% of fertilizer volumes imported from Russia and Belarus during the same year, the Council said.

The measures are expected to take effect within days after publication in the EU’s Official Journal.
The decision follows warnings from the United Nations Food and Agriculture Organization that a prolonged disruption of shipping through Hormuz could trigger severe consequences for global food systems by constraining access to fertilizers and raising production costs for farmers.

Early signs of strain are already emerging in agricultural markets. Australia, the world’s third-largest wheat exporter, is planting fewer crops this season amid elevated fertilizer costs, raising the risk of a substantially smaller harvest. Across parts of Asia, rice production is also expected to decline this year as the conflict compounds weather-related challenges associated with an emerging El Niño pattern.

According to the Council, the EU imported 2 million metric tons of ammonia and 5.9 million metric tons of urea in 2024, alongside 6.7 million metric tons of nitrogen-based fertilizers and nitrogen-containing mixtures.

The European Commission estimates the bloc’s direct reliance on Middle Eastern supplies remains relatively limited, accounting for about 3% of ammonia imports and between 1% and 2% of nitrogen fertilizer imports.

Managing Director Kristalina Georgieva said the war had caused the most severe disruption to global energy supply on record, with millions of barrels of oil production shut down due to Iran’s effective closure of the Strait of Hormuz.

“Instead, all roads now lead to higher prices and slower growth,” Georgieva told Reuters, adding that the IMF would cut its growth forecasts and raise inflation projections in its upcoming World Economic Outlook.

The conflict is expected to dominate discussions at next week’s IMF and World Bank spring meetings in Washington, where policymakers will assess the economic fallout from the crisis.

The Fund had previously anticipated a modest upgrade to global growth projections before the escalation.Georgieva said global oil supply had fallen by about 13%, with knock-on effects extending beyond energy markets into supply chains for commodities such as fertilizers and helium.

Brent crude prices have risen to around $110 per barrel, reflecting tightening supply conditions.She warned that even a swift resolution would leave a lasting economic impact, while a prolonged conflict would deepen inflationary pressures and further dampen growth prospects.

The effects are expected to be uneven, with energy-importing countries facing the greatest strain. Many low-income economies lack the fiscal capacity to cushion rising costs, increasing risks of economic instability and social unrest.

Georgieva said some countries had already sought financial assistance from the IMF, which could expand existing lending programs to address urgent needs. She cautioned against broad energy subsidies, arguing they could exacerbate inflation.Energy exporters have also been affected.

Damage to production infrastructure has slowed output recovery in some countries, including Qatar, where restoration of natural gas capacity could take several years.The IMF is coordinating with other global institutions, including the International Energy Agency and the World Bank, to assess the broader implications of the conflict.

Georgieva also highlighted risks to food security, noting that disruptions to fertilizer supplies could trigger wider shortages if the conflict continues.

The World Food Programme has warned that millions could face acute hunger if conditions worsen.

Regional governor Alexander Drozdenko said in a statement on social media that 38 drones were intercepted overnight and that the port, located on the Gulf of Finland, sustained fresh damage for the third time in a week.

He did not specify the extent of the damage.Repeated strikes on export hubUst-Luga is a major node for Russian exports of fertilizers, oil and coal, and has been targeted multiple times in recent days.

Russian authorities previously reported fires at the port following drone strikes on Sunday and Wednesday.The latest attack underscores growing pressure on infrastructure tied to Russia’s export revenues, which Kyiv has increasingly targeted as part of its military strategy.

Ukraine has stepped up long-range drone operations against Russian facilities, including refineries, oil depots and ports. Officials in Kyiv say such strikes are intended to disrupt revenue streams that support Moscow’s military campaign.

President Volodymyr Zelensky has defended the attacks as a proportionate response to Russia’s offensive, though Ukrainian authorities did not immediately comment on the latest incident.

Efforts to negotiate an end to the conflict have faltered, with talks between Moscow and Kyiv, brokered by the United States, losing momentum. Diplomatic attention has been diverted by intensifying hostilities in the Middle East, further complicating prospects for de-escalation in the four-year war.

Russia has not provided additional operational details on the overnight interceptions or potential disruptions to port activity.