Russia and Ukraine punched above their weight in the fertilizer market, especially for nitrogen and potash, because of their resource advantages and production scale. Russia was the world's top exporter of nitrogen fertilizers (like urea and ammonia), holding about 16% of global urea exports and 23% of ammonia exports before 2022 disruptions. Together with Belarus, it also supplied 40% of global potash exports, alongside Ukraine's smaller but still notable contributions.
Abundant Natural Gas in Russia: Nitrogen fertilizers, which dominate global use, rely heavily on ammonia production via the Haber-Bosch process, where natural gas is a key feedstock (70-90% of production costs). Russia sits on massive natural gas reserves -- about 19% of the world's proven total per BP's 2023 data -- and historically kept domestic gas prices low through state control. This gave Russian producers like Uralchem and EuroChem a cost edge, letting them churn out nitrogen fertilizers cheaply and flood export markets.
Potash Reserves in Russia and Ukraine: Potash, another critical fertilizer, comes from mined potassium salts. Russia and Ukraine (along with Belarus) have some of the world's largest deposits, notably in Russia's Urals region and Ukraine's Carpathian basin. Russia's Uralkali and Belarus's Belaruskali scaled up to export-focused giants, leveraging these reserves to meet global demand, especially in potash-hungry markets like Brazil and India.
Industrial Legacy and Export Focus: Soviet-era investments left both countries with hefty chemical and mining infrastructure. Post-1991, Russia pivoted to exports, capitalizing on low domestic demand (its ag sector is smaller than its energy focus) and proximity to Europe and Asia via Black Sea ports. Ukraine, though less dominant, piggybacked on similar infrastructure and export routes until the 2014 conflict and 2022 invasion disrupted its output.
Cheap Labor and Lax Regulation: Lower labor costs and less stringent environmental rules compared to North America kept production costs down, making their fertilizers competitive globally despite shipping expenses.
Before Russia's 2022 invasion of Ukraine, these factors made them key suppliers. Russia alone accounted for 15-20% of global fertilizer trade across nitrogen, phosphorus, and potash, per the International Fertilizer Association, with Ukraine adding smaller but critical volumes -- especially before war crippled its exports.
Why Didn't the U.S. or Canada Use Cheap Natural Gas to Grab More Market Share?
The U.S. and Canada have cheap natural gas -- thanks to the shale boom -- and are fertilizer powerhouses, but they didn't chase global dominance like Russia. Here's why:
Domestic Focus Over Exports:
U.S.: The U.S. is the world's top nitrogen producer (about 13% of global capacity) and a big phosphate player, but it consumes most of what it makes. Its massive corn and soybean belts guzzle fertilizers, leaving only about 10-15% of nitrogen production for export. Companies like CF Industries prioritize feeding the U.S. farm juggernaut over flooding foreign markets.
Canada: Canada leads in potash -- Nutrien produces over 30% of the world's supply from Saskatchewan -- but its nitrogen output is modest. It exports heavily (especially potash to Brazil and Asia), but its fertilizer industry isn't geared to dominate nitrogen, where Russia excelled.
Natural Gas Price Dynamics:The Bigger Picture
Russia and Ukraine thrived by marrying resource wealth with export-driven scale, while the U.S. and Canada leaned on self-sufficiency and regional strengths. Cheap gas helped North America, but they didn't weaponize it for global market share -- partly by choice, partly by circumstance. Post-2022, sanctions and war scrambled the board: Russia's exports dropped (e.g., nitrogen exports fell 15-20% by 2023 estimates), Ukraine's collapsed, and North America stepped up. Nutrien boosted potash output by 40% from 2020-2025, and U.S. nitrogen exports rose -- but they're still playing catch-up to Russia's former reach, constrained by time, scale, and focus.
Russia and Ukraine dominated through gas, geology, and grit.
Maybe Food Prices Drop with Fertilizers at $300/ton vs $400/ton
Base Case: Global food prices fall 5-10% by 2026-2027 if fertilizer hits $300/ton and exports normalize. Grains lead (10-15% wholesale drop), staples like bread or rice drop 3-8% at retail. FPI lands at 115-120.
Optimistic Case: 10-15% total drop if grain supply floods and energy stays tame -- FPI near 105-110, closer to 2020 norms.
Pessimistic Case: 2-5% drop if energy spikes or supply chains snag -- FPI sticks at 120-125.
Post-War Scenarios for Russia and Ukraine
If the war ends then Russia will likely increase production back to 2021 levels.
Its fertilizer industry -- giants like Uralchem, EuroChem, and Uralkali -- remains largely intact, with production capacity (e.g., 13% of global nitrogen, 15% of potash) still operational despite sanctions. Natural gas, the backbone of nitrogen fertilizers, is abundant domestically, and prices are state-controlled (around $2-$3/MMBtu vs. $6-$8 globally), giving it a cost edge. If sanctions lift or workaround payment systems (e.g., via India or China) stabilize, Russia could flood markets again. Pre-war, it exported 20-25 million tons annually; even with a 20% hit, it retained 15-18 million tons in 2023. A peace deal could push that back toward 25 million tons within 1-2 years, assuming logistics (e.g., Black Sea shipping) normalize.
If Russia dumps cheap fertilizer post-war, it could undercut rivals and reclaim 15-18% of trade within 2-3 years. Ukraine, with higher rebuild costs, might struggle to compete unless subsidized. But if global prices stay elevated ($400+/ton), new producers might hold firm, capping Russia and Ukraine at, say, 12-15% and 1-2% of the market, respectively, by 2028.
US and Canada Natural Gas and AI Data Center Boom
Wells Fargo estimates U.S. AI data center power demand could hit 35-42 gigawatts (GW) by 2030, up from 11 GW in 2022, with AI driving a chunk of that -- potentially 323 terawatt-hours (TWh) annually by 2030, per their April 2024 note. If natural gas fuels 40-60% of this (a reasonable guess given its 43% share of U.S. utility-scale power today), that's 7-10 billion cubic feet per day (Bcf/d) of extra demand. Goldman Sachs pegs it lower at 3.3 Bcf/d, while Tudor Pickering Holt & Co. sees a high case of 8.5 Bcf/d -- all by 2030.
Beyond AI, U.S. natural gas demand is already set to climb. LNG exports are projected to double from 11 Bcf/d today to 22-24 Bcf/d by 2030 as new Gulf Coast terminals come online, per Wood Mackenzie. Mexico's imports from the U.S. could rise 50% to 6-7 Bcf/d. Add in coal plant retirements, industrial reshoring, and backup for renewables, and total U.S. demand could jump from 100 Bcf/d in 2023 to 120-130 Bcf/d by 2030 -- a 20-30% leap.
Canada's story is similar: LNG Canada's Phase 1 alone will suck up 2 Bcf/d starting 2025, and proposed AI projects could push demand from 12 Bcf/d production to 20-30 Bcf/day.
By 2035, if AI adoption accelerates to 70-100 GW -- gas demand could rise another 10-20 Bcf/d.
Supply Side for 100+ Years
The U.S. has gas in spades -- over 2,900 trillion cubic feet (Tcf) of recoverable reserves, enough for 100+ years at current rates.
Price Drivers and Projections
Natural gas prices hinge on supply-demand balance, weather, geopolitics, and policy. Henry Hub, the U.S. benchmark, averaged $2.50/MMBtu in 2023, sank to $1.61 in early 2024 (mild winter glut), then surged to $3.73 in February 2025 amid cold snaps and LNG export records, per X posts and EIA data. The EIA's latest (February 2025) short-term outlook sees $3.79/MMBtu in 2025 and $4.16 in 2026, reflecting storage draws and export pull.
Analysts have wide ranging estimates for 2030. $4-8 per MMBtu is common speculation.
Russia would not be as involved in the AI buildout. This would again leave more market share for simpler industrial applications like fertilizer.