A major explosion at Qatar's Barzan gas plant in Ras Laffan Industrial City on Sunday evening has added new complications to fertiliser supply recovery efforts. The incident left 54 people injured and 18 missing, with officials emphasizing that no hazardous gas or material leaks were detected following the accident. According to Reuters, the blast occurred at the Barzan gas plant, a key facility that supplies natural gas to Qatar's domestic market and forms part of the country's main liquefied natural gas (LNG) processing hub. The explosion occurred during start-up operations as personnel were working to reactivate equipment at the facility, highlighting the operational risks associated with large-scale energy infrastructure. As reported by Business Standard, the blast at the Ras Laffan industrial area could cause further chaos in global energy markets, particularly as Qatar remains one of the world's top natural gas producers.
Fertiliser availability and prices may take another three to four months to return to normal despite the latest developments at Qatar's critical energy infrastructure. While a tentative US-Iran peace agreement is expected to ease pressure on global energy and shipping markets, industry executives said disruptions caused by the conflict in West Asia cannot be reversed immediately. As reported by The Times of India, a senior fertiliser company executive noted that 'it takes time to restart plants and bring production back to normal levels'. The latest analysis from energy economists suggests a 'ratchet effect' where energy prices may not return to pre-war levels until six months to a year of stable conditions in Iran, with the initial energy shock potentially marking only the first part of a more lasting inflationary impact.
Industry executives said ammonia prices, a crucial input for di-ammonium phosphate (DAP) production, could stabilise within one to two months after gas plants in Qatar return to normal operations. According to The Times of India, imported ammonia is currently available in the domestic market. However, sulphur prices are expected to remain elevated for a longer period, with wholesale sulphur prices currently between $815 and $1,200 per metric tonne. Sulphur, a key raw material for DAP and a by-product of petroleum refining, has surged to record levels due to supply disruptions in West Asia and strong industrial demand. The latest economic assessment indicates that other goods like fertilizer could remain in low supply for months, which could further increase food costs for months after the war is over, as reported by The Times of India.
Industry executives pointed to lingering logistical challenges despite the expected reopening of the Strait of Hormuz. As reported by The Times of India, several vessels carrying urea and DAP to India were stranded during the crisis. Refineries and gas-processing facilities will require safety inspections, maintenance checks, staff mobilisation and stable logistics before returning to full capacity. A senior industry executive warned that 'reopening a shipping lane does not instantly clear stranded cargo. There will be a queue of vessels, port congestion, delayed berthing, inspection delays and insurance approvals'. Shipping analysts are also expecting at least several weeks for a backlog of hundreds of ships that have been stuck in the region to clear out, with companies taking the peace deal with a grain of salt and likely waiting until it proves durable.
The concerns come even as a tentative agreement between the United States and Iran is expected to pave the way for the reopening of the Strait of Hormuz, a vital global energy route. According to The Times of India, leaked versions of the interim agreement indicate that Iran would take immediate steps to reopen the strait once the deal is formally signed in Switzerland on Friday. The agreement is also expected to allow Iran to resume unrestricted oil sales while broader negotiations on its nuclear programme continue. The Strait of Hormuz, through which a significant share of global oil and natural gas trade passes, could return to pre-war traffic levels within 30 days under the proposed arrangement. However, clearing the strait of mines could take months, with the closure of this narrow waterway where 20% of the world's oil supply passes through having caused energy prices to climb sharply higher during the conflict.
