Cease Fire Collapse Sparks Fuel and Fertilizer Price Spike
The collapse of the U.S./Iran cease fire agreement in early July sent shockwaves through fuel and fertilizer markets, leading to price increases. The fragile peace process unraveled with a fresh round of military exchanges, causing shippers to become reluctant to pass through the Strait of Hormuz.
Urea prices at the New Orleans (NOLA) market rose 20% in just two weeks, from $365.50 per ton on June 22 to $415.50 per ton by July 14. This increase was largely due to a one-day jump of $28 per ton on July 14.
The oil price surge also had an impact on the global market. West Texas Intermediate (WTI) crude hit $74.28 per barrel in early trade on July 13, up $8 from the previous week. Brent crude reached $79.10, a gain of $7.34 from the week prior.
Patrick De Haan, head of petroleum analysis at GasBuddy, warned that these price increases could lead to further gas and diesel price hikes in the coming weeks.