The Strait of Hormuz, a critical chokepoint, has been functionally closed to hydrogen derivatives traffic. Prior to the crisis, the strait carried 45% of global methanol exports, 38% of urea trade, and 20% of ammonia trade . Major producers like Qatar's QAFCO declared force majeure on ammonia and urea shipments .

IEA Executive Director Fatih Birol said the crisis has "highlighted how deeply economies around the world depend on trade in hydrogen-based products" .

Effects on Fertiliser Markets and Industrial Production

Fertiliser markets and industrial feedstocks have been directly hit. The IEA notes that sectors relying heavily on hydrogen derivatives — particularly fertilisers, refining, and chemicals manufacturing — have been disrupted .

The broader energy context worsened the impact: LNG markets are expected to remain "tight" throughout 2026 and 2027 due to the conflict, with shipping disruptions removing nearly 20% of global LNG supply and Qatar's Ras Laffan complex offline .

Low-Emissions Hydrogen: Growth Amid a Shrinking Pipeline

Global hydrogen demand exceeded 100 million tonnes in 2025 . Low-emissions hydrogen production grew by 20% year-on-year to nearly 1 million tonnes . Investment in low-emissions hydrogen reached $8 billion globally in 2025, an 80% increase year-on-year . Global electrolyser capacity reached close to 5 GW by end of 2025, with China accounting for roughly 40% .

However, the project pipeline is shrinking. Expected low-emissions hydrogen production capacity by 2030 has declined to 27 million tonnes, and projects that have reached final investment decisions (FID) have fallen to just over 6 million tonnes — down from 10 million tonnes previously .

Demand-side weakness persists. Only about 20% of new hydrogen offtake volume in 2025 was backed by firm contractual commitments, limiting investment and delaying project development .

Economic and Geopolitical Developments

The crisis has renewed interest in hydrogen as a long-term energy security solution, but the IEA stresses that stronger policy support and faster deployment are needed for it to have a meaningful impact .

The IEA highlighted opportunities for regions such as Africa to expand into higher-value industries like steel production and local fertiliser manufacturing, provided financing costs are reduced and hydrogen strategies align with broader economic plans .

Persistent barriers remain: high production costs, uncertain demand, regulatory complexities, and limited infrastructure are slowing the sector's growth . Many national 2030 hydrogen targets are increasingly at risk as the announced project pipeline continues to shrink .

The Strait of Hormuz, a critical chokepoint, has been functionally closed to hydrogen derivatives traffic. Prior to the crisis, the strait carried 45% of global methanol exports, 38% of urea trade, and 20% of ammonia trade . Major producers like Qatar's QAFCO declared force majeure on ammonia and urea shipments .

IEA Executive Director Fatih Birol said the crisis has "highlighted how deeply economies around the world depend on trade in hydrogen-based products" .

Effects on Fertiliser Markets and Industrial Production

Fertiliser markets and industrial feedstocks have been directly hit. The IEA notes that sectors relying heavily on hydrogen derivatives — particularly fertilisers, refining, and chemicals manufacturing — have been disrupted .

The broader energy context worsened the impact: LNG markets are expected to remain "tight" throughout 2026 and 2027 due to the conflict, with shipping disruptions removing nearly 20% of global LNG supply and Qatar's Ras Laffan complex offline .

Low-Emissions Hydrogen: Growth Amid a Shrinking Pipeline

Global hydrogen demand exceeded 100 million tonnes in 2025 . Low-emissions hydrogen production grew by 20% year-on-year to nearly 1 million tonnes . Investment in low-emissions hydrogen reached $8 billion globally in 2025, an 80% increase year-on-year . Global electrolyser capacity reached close to 5 GW by end of 2025, with China accounting for roughly 40% .

However, the project pipeline is shrinking. Expected low-emissions hydrogen production capacity by 2030 has declined to 27 million tonnes, and projects that have reached final investment decisions (FID) have fallen to just over 6 million tonnes — down from 10 million tonnes previously .

Demand-side weakness persists. Only about 20% of new hydrogen offtake volume in 2025 was backed by firm contractual commitments, limiting investment and delaying project development .

Economic and Geopolitical Developments

The crisis has renewed interest in hydrogen as a long-term energy security solution, but the IEA stresses that stronger policy support and faster deployment are needed for it to have a meaningful impact .

The IEA highlighted opportunities for regions such as Africa to expand into higher-value industries like steel production and local fertiliser manufacturing, provided financing costs are reduced and hydrogen strategies align with broader economic plans .

Persistent barriers remain: high production costs, uncertain demand, regulatory complexities, and limited infrastructure are slowing the sector's growth . Many national 2030 hydrogen targets are increasingly at risk as the announced project pipeline continues to shrink .