Where does urea come from?

This page carries no production ranking, and the reason is worth stating plainly. Ammonia and urea capacity by country is compiled from company returns by the International Fertilizer Association and published under license, so it is not carried here. The origin picture is built instead from the export table below, which records what actually left a country, together with the chemistry that decides where a plant can profitably be built in the first place.

That chemistry is short and unforgiving. Nitrogen makes up most of the atmosphere but plants cannot use it as a gas, so it has to be fixed into a reactive form. The Haber-Bosch process does this by combining nitrogen taken from the air with hydrogen at high temperature and pressure over an iron catalyst to make ammonia. Almost all of that hydrogen comes from steam reforming of natural gas, and the same reformer throws off carbon dioxide as a by-product. Ammonia and carbon dioxide are then reacted together to make urea, a white solid that is 46% nitrogen by weight, the highest concentration of any solid fertilizer. A urea plant is therefore a natural gas plant with two extra steps, and gas is both the raw material and the fuel, which makes it the largest single element of the cash cost.

That single fact draws the map. Urea capacity clusters where gas is abundant, cheap and awkward to sell any other way: Qatar, Oman, Saudi Arabia, Iran and the United Arab Emirates on the Persian Gulf; Egypt and Algeria on the Mediterranean; Nigeria and Trinidad on the Atlantic; Russia on its own vast reserves; and Brunei, Malaysia and Indonesia in Southeast Asia. Turning stranded gas into a solid that any bulk carrier can take is often more attractive than building a liquefaction train. China is the exception that proves the rule, because its ammonia is made largely from coal rather than gas, which puts its cost curve on the thermal coal market instead of the gas market. India and much of Europe run plants on expensive imported gas for reasons of policy and proximity to demand rather than cost.

Because production is not public, exports do the work of describing origin here, and they do it with a known bias. Countries that produce a great deal and consume nearly all of it, notably China and India, appear far smaller in an export table than they are in reality, while a country like Oman, with modest agriculture and large gas reserves, appears very large. Read the table as a map of who has surplus, not of who has plants. The relationship to gas is direct enough that the urea price and the natural gas price should be read together: when European gas is expensive, European ammonia plants stop, Europe buys imported urea instead, and the world price rises.

In 2024 the largest exporter of urea (HS 310210) was Russia, with $3.2 billion, or 16% of the world's $20.5 billion of export value (CEPII BACI), ahead of Oman (13%), Qatar (8.8%), Saudi Arabia (8%) and Egypt (7.5%). Between them the Persian Gulf and North Africa supply most of what crosses a border. On the buying side Brazil took $2.9 billion, 14% of the world's $20.5 billion of imports, followed by India (10%), United States (9.2%) and Australia (7%).

Widening from urea to all nitrogenous fertilizers under HS 3102, which adds ammonium nitrate, ammonium sulfate, calcium ammonium nitrate and UAN solution, the trade was worth $34.5 billion in 2024. Russia led with 14%, then China (9.6%) and Oman (7.9%), while Brazil (13%) and United States (9.3%) were the largest importers. The wider heading brings in European producers who make nitrate fertilizers for their own continent, which is why the two tables rank differently. Note also that the import table counts finished urea only: India and the United States both import ammonia as well, which does not appear here at all.

Urea is the most standardized and most liquid fertilizer in the world, and it comes closest to trading like a commodity rather than a specialty. It is one product, 46% nitrogen, made to the same specification everywhere, easy to store and cheap to handle, so cargoes are genuinely fungible between origins. Prices are published as weekly assessments by reporting agencies such as Argus, Profercy, CRU and Fertilizer Week, built from reported deals, bids and offers at each loading point, and a cash-settled swap market settled against those assessments gives producers, traders and distributors a way to hedge. Those swaps are the most active fertilizer derivatives there are, though they remain small next to the physical trade.

The series charted here is Urea, FOB Middle East. In August 2026 it stood at $390/t, down 23% from a year earlier (World Bank Pink Sheet). The record monthly average is $925/t, set in April 2022 as European gas prices and the invasion of Ukraine hit the market together; measured against US consumer prices the real high was much earlier, $1,916/t in January 1974, during the first oil shock. The lowest month in a series that begins in 1960 was $16/t in January 1971. FOB means the granules loaded onto the ship at the exporting berth; a CFR quote at Brazil, India or New Orleans is the same product with ocean freight, insurance and discharge added, and the difference between the two is a freight number rather than a fertilizer one.

Two more conventions matter when reading a quote. The first is physical form. Prilled urea is made by dropping molten urea down a tower so it solidifies into small beads, and granular urea is built up in layers in a drum into larger, harder particles that survive bulk blending and spread further from a mechanical spreader. They are priced separately, and India has traditionally bought prilled while the Americas buy granular. The second is that the single largest recurring event in the market is an Indian import tender: the state trading agencies announce a purchase, the offers are published, and the awarded price resets assessments worldwide within days. Contracts otherwise tend to be short, a cargo or a season, because the product is standard and buyers see little reason to lock in.

Gas is the feedstock and the fuel, so the cost curve of the industry is a map of gas prices. Producers in the Persian Gulf, North Africa and Russia buy gas at regulated or netback prices far below European levels, while European plants pay the traded price at the Dutch hub. That makes Europe the marginal producer: when gas there rises far enough, European ammonia and urea plants cut runs or close, Europe imports more, and the world price is pulled up to the level that keeps enough of that expensive capacity running.

India is among the largest importers and buys through periodic state tenders rather than continuous purchasing, so its demand arrives in blocks. Domestic urea is sold to farmers at a controlled price with the difference met by subsidy, which means the retail signal never reaches the farmer and Indian consumption is stable while Indian import timing is not. A large tender announced into a thin market lifts assessments worldwide, and a long absence of tenders lets them drift down just as quickly.

China makes most of its ammonia from coal rather than gas, so its production costs move with thermal coal and with power rationing rather than with the gas market. It is also a large swing exporter, and Beijing regulates that flow through export inspection requirements and seasonal windows in order to protect domestic supply and hold down farm costs. When Chinese tonnes are withheld, buyers in Australia, Southeast Asia and Latin America must bid for Middle Eastern product instead, and the whole curve moves.

Nitrogen is applied in a few short windows: spring top-dressing on European and Chinese cereals, pre-plant and side-dress on North American corn, and the Indian kharif and rabi seasons. Because urea cannot be stored indefinitely without caking and because storage costs money, buyers try to arrive just before the window opens, and freight and port capacity bind at the same moment everywhere. That seasonality gives the market a repeating rhythm on top of the underlying gas and crop signals.

Nitrogen is the least deferrable nutrient, because most soils hold little of it in plant-available form and a skipped application costs yield in the same season. Demand is therefore steadier than for phosphate, but it is not immune. High corn prices raise both planted area and the rate applied per hectare, since corn is the most nitrogen-hungry major crop; low grain prices trim the rate. The ratio between the urea price and the corn price is the number farm agronomists actually watch.

Russia is among the largest exporters, so sanctions, payment friction and shipping restrictions redirect a large volume without destroying it, opening regional price gaps that would otherwise be arbitraged away. Physical geography compounds this: cargoes from the Persian Gulf pass Hormuz, and those bound for Europe and the Atlantic then pass Bab el-Mandeb and Suez. Diversions around southern Africa add weeks of freight to a low-value bulk cargo, which shows up directly in delivered prices in Brazil and Europe.

Urea plants are built in a few very large units rather than many small ones, and each takes years from decision to first product. Investment decisions cluster after price spikes, so new capacity in Nigeria, Russia, the United States and the Gulf tends to arrive together several years later, often into a market that no longer needs it. That lag between the signal and the supply is why the series shows long flat stretches punctuated by violent spikes rather than a smooth cycle.

Ammonia production is one of the largest industrial sources of carbon dioxide, because the reformer releases a molecule of it for every batch of hydrogen. Border carbon adjustment in the European Union prices the emissions embodied in imported fertilizer, which changes the relative cost of a Russian, Egyptian or European tonne without changing anyone's plant. Projects that capture the reformer's carbon dioxide or make hydrogen by electrolysis are being built on the strength of those rules rather than on their own costs.

The front end of a urea plant makes hydrogen. Natural gas is desulfurized and mixed with steam over a nickel catalyst at high temperature, which strips hydrogen from the methane and leaves carbon monoxide; a shift reactor converts that carbon monoxide with more steam into carbon dioxide and yet more hydrogen. The carbon dioxide is scrubbed out and set aside, because it will be needed again. Air is introduced to supply nitrogen, traces of remaining oxides are removed, and the cleaned mixture of nitrogen and hydrogen is compressed to a few hundred bar and circulated over an iron catalyst in the synthesis loop, where a fraction converts to ammonia on each pass and is condensed out as a liquid.

Urea synthesis then puts the reformer's two waste streams back together. Liquid ammonia and the recovered carbon dioxide are pumped into a reactor at high pressure, where they combine into ammonium carbamate, which dehydrates to urea and water. Unconverted carbamate is stripped out and recycled, and the urea solution is concentrated by evaporation. From there the plant chooses a shape: molten urea sprayed at the top of a tall prilling tower falls and solidifies into small beads, while a granulation plant sprays it onto seed particles tumbling in a drum or fluidized bed to build larger, harder granules. Granules survive long-distance bulk handling and blending better, which is why most new plants build them.

The finished product is screened, cooled, treated with an anti-caking agent and stored in large flat warehouses before being loaded to ship. Two chemical facts follow it into the field. Urea is hygroscopic, so it absorbs moisture and cakes if stored badly. And once spread, it is converted by the soil enzyme urease into ammonium, a step that releases ammonia gas at the surface and can lose a meaningful share of the nitrogen if the fertilizer is not incorporated or rained in; urease inhibitors and polymer coatings are sold to slow that loss. The same base chemistry supports the sister products: ammonia reacted with nitric acid gives ammonium nitrate, and a blend of urea and ammonium nitrate in water gives UAN, a liquid that can be sprayed.

Most urea is spread on fields. It is the dominant solid nitrogen fertilizer worldwide because it carries more nitrogen per tonne than any alternative, which makes it the cheapest form to ship and to spread, and because it suits almost every crop and soil. Nitrogen is the nutrient applied in the largest volume of the three, and urea is the principal product carrying it. Cereals take the largest part, with rice, wheat and corn between them accounting for most world nitrogen use, and sugar cane, oil palm and cotton adding significantly in the tropics.

The industrial uses are small in tonnage but visible in daily life. The largest is diesel exhaust fluid, a solution of about a third urea in demineralized water that is injected into the exhaust of diesel engines so that ammonia can reduce nitrogen oxides to nitrogen and water; tightening vehicle emission rules have made this a fast-growing outlet. Urea is also the nitrogen half of urea-formaldehyde and melamine-formaldehyde resins, the glues that hold together particleboard, medium-density fiberboard and much interior plywood. It is used as a protein substitute in ruminant feed, as a de-icer that does not corrode airport concrete, and as a humectant in skin creams and pharmaceuticals.

The chain is short: gas in at one end of a single site, bagged or bulk granules out at the other, with a jetty attached. Because ammonia is toxic and expensive to move under refrigeration, the industry prefers to convert it to urea at the plant rather than ship it, which is why merchant ammonia trade is small next to urea trade. The consequence is that a handful of coastal complexes account for most exportable supply: Ruwais and Sohar on the Gulf of Oman, Ras Laffan and Mesaieed in Qatar, Jubail in Saudi Arabia, Damietta and Ain Sokhna in Egypt, Arzew in Algeria, Onne in Nigeria, Point Lisas in Trinidad and the Baltic and Black Sea terminals serving Russian plants.

Cargoes move in Handysize and Supramax bulk carriers to a small set of discharge markets. Brazil takes fertilizer through Paranaguá, Santos and São Francisco do Sul before a long inland haul; the United States discharges at New Orleans and distributes by barge up the Mississippi and Ohio to river terminals, so American nitrogen prices are quoted at NOLA and at the inland terminals separately; India spreads discharge across a dozen ports on both coasts; Australia and Southeast Asia buy directly from the Gulf. Bagging often happens at the destination rather than the origin, because bags take more space than bulk.

The vulnerabilities are gas supply, geography and law. A country that exports urea because its gas is cheap stops exporting the moment domestic power demand or a field decline takes that gas away, which has idled Egyptian and Trinidadian capacity in the past without any change in fertilizer demand. Every Gulf cargo passes Hormuz, and those bound for Europe and the Atlantic pass Bab el-Mandeb and Suez as well, so a Red Sea diversion adds weeks to the route at the season when European and American buyers need product. Sanctions on a large exporter do not remove tonnes from the world but do force them onto longer voyages to different buyers. And low water on the Mississippi can strand American nitrogen at the coast during the spring application window, when it is least replaceable.