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The EU spent three years building a new energy supply chain. It replaced Russian pipeline gas with US liquefied natural gas, and planned to replace Russian fertilizer with Gulf alternatives. Then the Strait of Hormuz shut down. Both replacements are now under pressure simultaneously, and Washington sits at the centre of both.
The Gas Story Everyone’s Following. The Fertilizer Story Nobody Is.
EU gas storage ended this past winter below 30% of capacity, the lowest exit level since 2018. The International Energy Agency projected in early 2026 that European LNG imports will reach 185 billion cubic metres this year, a record high, as buyers race to refill. As of May 11, TTF front-month futures were trading at €44.7 per megawatt-hour, volatile in both directions depending on the daily state of US-Iran ceasefire talks. That’s the story most market desks are watching.
Here’s the one they’re largely ignoring. Copa and Cogeca, the Brussels-based lobby representing Europe’s farmers and agricultural cooperatives, reported in February 2026 that nitrogen fertilizer imports into the EU collapsed to just 179,877 tonnes in January 2026, down from 1.18 million tonnes in January 2025. That’s an 85% drop in a single year. The group describes current stocks as covering only 45 to 50% of what farmers need for the 2026 harvest, with the most acute shortfalls reported in Italy and Ireland. It has called for an immediate suspension of CBAM on fertilizers. Nobody in Brussels appears to be moving that fast.
The two crises share the same structural failure. Europe replaced one geopolitically exposed supplier with alternatives that turned out to carry different but equally real risks.
From Russia to Washington to the Gulf, All at Once
After Russia’s invasion of Ukraine in 2022, European gas importers pivoted hard toward US LNG. According to IEEFA’s January 2026 analysis by energy analyst Ana Maria Jaller-Makarewicz, EU imports of US LNG rose from 21 billion cubic metres in 2021 to an estimated 81 bcm in 2025, a near-fourfold increase in four years. That figure represented 57% of all EU LNG imports last year. Germany now sources more than 90% of its LNG from the United States, according to OSW Centre for Eastern Studies analysis published in February 2026. In July 2025, the EU signed a trade deal with Washington committing to purchase $750 billion of US energy by 2028.
Whether that constitutes diversification is a live debate. Bruegel’s March 2026 analysis, authored by Ugnė Keliauskaitė, Ben McWilliams and Georg Zachmann, makes the fairest case for the defence: US LNG is seaborne, meaning European buyers can switch suppliers more easily than they could with Russian pipeline gas, and private American companies are not subject to state direction in the way Gazprom was. That is a structural difference worth acknowledging. But IEEFA’s Jaller-Makarewicz puts the trajectory plainly: if all current supply deals materialise and EU gas demand reduction efforts falter, the bloc could source between 75 and 80% of its LNG imports from the United States by 2030. Under that scenario, European buyers would depend on a single origin for the large majority of their LNG supply, and Bruegel itself notes that US LNG is the most expensive option available to European buyers. Concentration at that level, in the most expensive product on the market, is not a position of strength.
The fertilizer track ran in parallel. Russia and Belarus together supplied roughly 33% of EU fertilizer imports before 2022, per Kpler’s November 2025 analysis. European Parliament voted in May 2025 to phase in tariffs on Russian and Belarusian nitrogen fertilizers: 6.5% ad valorem plus €40 to €45 per tonne through 2026, rising in stages to €430 per tonne by 2028. At that terminal rate, Russian material becomes uncompetitive in European markets entirely. The European Parliament’s press office described the measure as targeting revenues “directly contributing to the war against Ukraine.” The alternative supply plan pointed to Egypt, Algeria, the US, and Gulf producers including the UAE, Saudi Arabia and Qatar. On paper that was workable. In practice, the Strait of Hormuz closed before the transition had completed.
Hormuz Didn’t Care About the Transition Plan
Since the US and Israeli strikes on Iranian energy infrastructure at the end of February 2026, the Strait of Hormuz has been largely closed to commercial shipping. Euronews reported on March 20 that around one third of global fertilizer trade passes through the strait. Gulf producers including the UAE, Saudi Arabia and Qatar, which together account for roughly 15 million tonnes of annual urea exports per GPCA data, cannot ship those volumes as planned. The European Commission proposed in February to temporarily suspend general tariffs on fertilizer from other origins, specifically North Africa and the US, to ease access to alternatives. That helps at the margin. It does not replace 15 million tonnes of Gulf urea that can’t move through a blocked waterway.
The farm-level price signal is already unmistakable. Euronews quoted German farmer Paul Henschke in March: he was receiving 176 euros per tonne for bread wheat and paying more than three times that for fertilizer, with urea running at 550 euros per tonne. Calcium ammonium nitrate rose around 15% in Lower Saxony within a single month. The situation is not yet comparable to 2022, when urea briefly exceeded 1,000 euros per tonne. But the direction is the same: supply constrained, demand for the 2026 growing season inelastic, and prices moving faster than farm-gate revenues can absorb.
The market is also producing an outcome nobody planned for. Euronews reported that some Western European traders have started turning back toward Russian supplies as Gulf alternatives dried up. Those volumes now arrive with EU tariffs attached, meaning buyers pay a sanctioned-supply premium on top of already elevated prices. Europe is discovering, as Britain did in its own trade renegotiations with Washington, that commodity dependencies don’t dissolve when you change the supplier’s name. They just migrate.
Washington at the Centre of Both
This is where the two supply chains converge. US LNG now supplies 57% of EU LNG imports. US fertilizer is being positioned as a direct replacement for Russian and Gulf product under the Commission’s February tariff suspension proposal. Washington is the key supplier in both markets simultaneously, at a moment when both markets are stressed.
Bruegel’s March analysis is careful not to overstate the leverage this creates. Keliauskaitė, McWilliams and Zachmann argue that the US cannot easily pressure Europe by threatening to cut energy supplies, because private American companies are not subject to political direction, and because global LNG markets are liquid enough that supply gaps would show up as price increases rather than physical shortages. That is technically true. But Columbia University’s Center on Global Energy Policy flagged a separate mechanism in January 2026: Trump’s stated goal of lowering domestic US gas prices could actually reduce the incentive for American producers to export LNG to Europe at the volumes the EU is counting on. The price channel and the volume channel work differently, and neither is entirely in Brussels’ control.
On fertilizers, the gas-intensity of US production creates a direct pass-through. US nitrogen fertilizer is priced against Henry Hub. European buyers switching from Gulf urea to American urea do not escape gas price exposure, they just relocate it from TTF to a different benchmark. European manufacturers are absorbing elevated input costs across the board, from energy to industrial metals, and the agriculture sector is now joining that queue. The World Bank’s April 2026 Commodity Markets Outlook projected overall commodity prices rising 16% in 2026, with energy up 24%. Those figures feed directly into European CPI, which hit 3% in April per Eurostat’s flash estimate.
The Summer Window Is the Critical Variable
On gas, the mandatory EU storage target is 80% by November 1. Starting from below 30%, competing for LNG cargoes in a global market where Asian buyers are also purchasing actively, and doing so with TTF well above the levels European industry budgeted for 2026, the maths is tight. ACER confirmed in late April that the target remains achievable but will cost more and carry less margin for error than in previous years. European LNG import capacity has expanded significantly since 2022, reaching 270 bcm of annual throughput per Bruegel data, which provides physical flexibility. The cost of using that capacity, however, is a function of global market prices that no institution in Brussels sets. Asian markets have shown considerably more insulation from the Hormuz disruption’s direct commodity effects, in part because of a different energy mix and geographic distance from the strait. Europe does not have those buffers.
On fertilizers, the window is even narrower and more immediate. Nitrogen application for the 2026 European harvest is concentrated in spring and early summer. Copa and Cogeca’s assessment that stocks cover only 45 to 50% of requirements is not a forward-looking warning. It is a current-season problem. If European farmers cannot apply adequate nitrogen this growing season, the impact on 2026 yields will be visible in harvest data by August. Food price inflation, which Eurostat’s April flash estimate put at 2.5%, has another leg to run if yields disappoint. The deflationary pressure that China continues to export through manufactured goods does not offset food and energy inflation in the European consumer basket. Those are different line items.
Substitution Is Not the Same Thing as Security
Renew Europe MEP Ľubica Karvašová told the European Parliament in May 2025 that Russian fertilizers are “only gas imports in another form.” That framing justified the tariffs. It applies with equal force to what has replaced them. US fertilizer is also gas in another form, specifically American shale gas processed into nitrogen at Henry Hub prices. US LNG is American gas shipped at American margins. Europe has replaced Russian gas, in fertilizer form and in liquefied form, with American gas, in fertilizer form and in liquefied form. The geopolitical exposure is different in character, as Bruegel correctly argues. The price exposure is not lower.
IEEFA’s January 2026 report states directly that the EU’s rising reliance on US LNG “contradicts the REPowerEU plan of enhancing EU energy security through diversification.” That is not a fringe position. It is the view of the institution that has tracked EU energy import flows most closely through this transition. The EU’s standard response points to renewable buildout and declining long-term gas demand. That response is structurally correct over a ten-year horizon. It is not available as an answer to a farmer who cannot afford fertilizer in March 2026, or a gas buyer trying to fill storage before November.
Both exposures will be clearer by September. The refill season and the harvest window close around the same time. Whether Washington uses either as a point of commercial leverage before then is the variable nobody’s model captures cleanly, and Brussels is betting it won’t.
