Is Fertilizer Made From Oil? Gas, Coal and the Real Link

Is fertilizer made from oil? Mostly no. Nitrogen fertilizer, the biggest fertilizer group, is made from natural gas or coal, not crude oil. The U.S. Energy Information Administration says natural gas feeds 72% of the world’s ammonia plants and coal 22%, and that gas-fed plants account for 92% of all U.S. ammonia production (EIA, 2021). Oil still touches fertilizer through sulfur, fuel and price swings, and this guide shows where.

It also compares how much nitrogen a ton of urea, manure and compost really holds, charts 2026 price moves, and gives you a calculator for the cost of a pound of nitrogen from different sources.

Is fertilizer made from oil, petroleum or gas?

Fertilizers fall into three nutrient groups: nitrogen, phosphate and potash. Each has a different source, and only one is tied closely to fossil fuels as a raw material.

So the short answer to “is fertilizer a petroleum product” is no. Petroleum is not a main feedstock for nitrogen, phosphate or potash. But the oil, gas and fertilizer industries are linked by shared energy markets, shipping routes and by-products, which is why fertilizer prices often move with energy prices.

Why nitrogen is made this way

Air is about 78% nitrogen, but plants cannot use that form. Before 1908, farmers relied on manure, legumes and the limited reactive nitrogen already in soils for plant-ready nitrogen (Our World in Data). Synthetic nitrogen changed that. Researchers estimate that around 48% of the world’s population was fed with the help of synthetic nitrogen fertilizer in 2008 (Erisman et al., 2008, as summarised by Our World in Data). Other estimates fall in a 40 to 50% range, so treat the exact share as approximate.

That scale explains why the industry sits where gas is cheap and plentiful, and why the question “does fertilizer come from oil” matters to farm budgets. A nitrogen plant is, in effect, a way to turn gas and air into a crop nutrient.

How nitrogen fertilizer is made from natural gas

Nearly all synthetic nitrogen fertilizer starts with ammonia. Ammonia is made by the Haber-Bosch process, which German chemists first developed in 1908 and industrialised soon after (Our World in Data). The process joins nitrogen from the air with hydrogen under high pressure and heat. The U.S. Congressional Research Service describes the hydrogen as coming from a fossil fuel feedstock (CRS, December 2022).

Infographic

From air and gas to nitrogen fertilizer

1. 1Take nitrogen from airNitrogen is generally obtained from the air (CRS, 2022).
2. 2Get hydrogen from a fuelThe hydrogen comes from a fossil fuel, mainly natural gas in the U.S.
3. 3React under heat and pressureThe Haber-Bosch process makes ammonia in a high-pressure, high-heat reaction.
4. 4Make fertilizer productsAmmonia becomes urea, ammonium nitrate and other products (USGS, 2026).
5. 5Ship to farmsPlants move product by pipeline, rail, barge and truck.

In the United States that feedstock is natural gas. The U.S. Geological Survey says natural gas is the dominant domestic feedstock for ammonia, and about 57% of U.S. ammonia capacity sits in Louisiana, Oklahoma and Texas because of their gas reserves (USGS, Mineral Commodity Summaries 2026). Plants then turn the ammonia into urea, ammonium nitrate and other products. The USGS lists urea, ammonium nitrate, nitric acid, ammonium phosphates and ammonium sulfate as the major U.S. ammonia derivatives, and about 88% of U.S. ammonia goes to fertilizer.

The table follows the EIA Natural Gas Weekly Update of 1 April 2021; the 6% is what is left after gas and coal. EIA says 98% of ammonia plants use fossil fuels, so about 4% use other fossil fuels that it does not name, and about 2% use none. The Fertilizer Institute, an industry body, makes the same point: coal is the feedstock for an estimated 22% of production, mostly in China, while natural gas is the main feedstock in the U.S. and most other places (The Fertilizer Institute). The CRS adds that China makes almost a third of the world’s ammonia using coal (CRS, 2022).

The U.S. supply picture

The USGS counted 18 companies running 38 ammonia plants in 19 states in 2025, with plants running at about 80% of rated capacity. U.S. ammonia production was an estimated 14,000 thousand metric tons of nitrogen content in 2025. Net import reliance was 5% of apparent consumption. Over 2021 to 2024, imported ammonia came from Canada (49%) and Trinidad and Tobago (47%). Supply can still be hit abroad: in October 2025 one company shut a Trinidad plant that had been making about 85,000 tons of ammonia and 55,000 tons of urea a month, after port and gas supply problems (USGS, 2026).

Where oil does touch the fertilizer supply chain

Oil is not a feedstock, but it shows up in four places.

• Sulfur for phosphate. Phosphate fertilizer is made by treating phosphate rock with sulfuric acid. The USGS reports that elemental sulfur is recovered, in order of tonnage, at petroleum refineries, natural-gas-processing plants and coking plants (USGS, 2026). So fertilizer uses a by-product of oil refining, not the other way round.
• Energy and shipping. Fertilizer is heavy. Trucks, trains and ships burn fuel to move it, and farm machinery burns diesel to spread it.
• Shared price drivers. Energy and fertilizer markets share supply shocks, but they do not always move together: after the April 2026 ceasefire oil fell below US$100 a barrel while U.S. nitrogen prices kept rising (farmdoc daily, April 2026). The World Bank calls natural gas the main production cost for nitrogen fertilizers (World Bank, May 2026).
• Shared trade routes. The Strait of Hormuz carries oil, liquefied natural gas and fertilizer. The same chokepoint matters for all three.

The question “is fertilizer a byproduct of crude oil” therefore has a clear answer. It is not. The nearest real by-product link is sulfur, which goes from oil and gas processing into phosphate fertilizer.

Phosphate and potash are mined, not drilled

Potash is dug or dissolved out of salt deposits. The USGS reports that U.S. marketable potash production was an estimated 500 thousand metric tons of K2O equivalent in 2025, mostly from southeastern New Mexico, with more from Utah (USGS, Mineral Commodity Summaries 2026). Phosphate fertilizer comes from mined phosphate rock. Both are energy-intensive to mine, grind and ship, but neither is made from oil or gas.

This is why a gas price shock hits urea and ammonia hardest and potash least, as the 2026 price data below show.

Why fertilizer prices follow gas and shipping

The USGS puts the average Gulf Coast ammonia price at about US$450 per short ton for 2025, after US$1,070 in 2022 (USGS, 2026). Per farmdoc daily, that spike followed higher natural gas costs, COVID-era supply disruptions and Russia’s invasion of Ukraine. The Henry Hub natural gas price averaged about US$3.44 per million British thermal units in 2025, within a range of US$2.42 to US$10.07.

Chart

U.S. ammonia price, Gulf Coast

US$ per short ton, annual average, free on board; 2025 is an estimate

In 2026 a second shock hit. After shipping through the Strait of Hormuz collapsed from late February, the World Bank said its fertilizer price index in April 2026 reached its highest level since October 2022, and urea passed US$850 per metric ton, up 80% since February (World Bank, 14 May 2026). The Middle East accounts for nearly a quarter of global urea exports, according to the same post.

Researchers at the University of Illinois and the University of Kentucky tracked what this meant for U.S. farmers. In the week of 13 April 2026 the DTN national retail average for anhydrous ammonia was US$1,114 per ton and for urea US$858 per ton, while potash at US$491 per ton barely moved (farmdoc daily, April 2026). The same report puts the extra nitrogen cost at roughly US$30 to US$55 per acre. It also notes that 17% of U.S. urea consumption came from the Persian Gulf in 2023.

What the jump meant per acre

The Illinois economists converted the price rise into field costs. A US$252 per ton increase in anhydrous ammonia works out to US$0.126 per pound of product. At 180 to 200 pounds of nitrogen per acre, that adds roughly US$28 to US$31 per acre. For urea the added cost was about US$49 to US$54 per acre at typical rates, and the report puts the overall rise at about 7 to 13 bushels of corn per acre in extra nitrogen cost (farmdoc daily, April 2026).

Pre-booking softened the blow for some. A Farm Bureau survey cited in the same report found that 67% of Midwestern respondents had secured fertilizer before the season, against 19% in the South, 30% in the Northeast and 31% in the West. Nationally, about 70% of respondents said they could not afford all the fertilizer they needed. The lesson for planning is simple: nitrogen is the input most exposed to gas and shipping shocks, so it pays to price it per pound of nitrogen and to know your options before the spring rush.

Sulfur shows the same pattern for phosphate. The USGS says the value of U.S. sulfur shipments rose by about US$1 billion in 2025 as the price went to US$180 per ton from US$46, and the World Bank links rising sulfur prices to higher DAP prices in 2026.

These are retail list prices for one week. Your quote from a dealer will differ by region, delivery and timing, so use today’s local price in the calculator below.

Chart

Retail fertilizer prices, before and after Hormuz disruption

US$ per ton, DTN national retail average; before-conflict values calculated from reported percent changes and rounded

Organic and biofertilizer: what they are and how much they hold

Organic fertilizers are made from plant or animal material, such as manure, compost and bone meal. Biofertilizers are different. They contain living microbes, such as nitrogen-fixing bacteria, phosphate-solubilising microbes and mycorrhizal fungi, that help crops get nutrients that are already in the soil or the air.

▶ Why organic matter matters in soil and agriculture. · 7:33

Chart

Nitrogen in one ton of product

Pounds of nitrogen per ton as sold or as spread; selected products

The key difference for planning is concentration. Urea is 46% nitrogen and anhydrous ammonia is 82% (University of Minnesota Extension). A ton of fresh broiler litter holds about 55 pounds of nitrogen on an as-is basis, and a ton of solid dairy manure about 11 pounds (University of Kentucky Extension, AGR-146). Ohio State Extension reports turkey compost from 35 Ohio samples at about 39 pounds of total nitrogen per ton (Ohio State, 2025).

Part of that nitrogen is slow to reach the crop. Georgia extension notes that only about half the nitrogen in a ton of poultry litter is available to plants in the season it is applied. Manures and compost also supply phosphorus and potassium, and if soil phosphorus is already high, that can become a runoff problem. A soil test and a nutrient plan come first.

Do biofertilizers raise yields?

A global meta-analysis of 171 published studies found that biofertilizers raised crop yields by 16.2% on average compared with untreated controls (Schütz et al., Frontiers in Plant Science, 2018). The gain varied by climate: +20.0% in dry climates, +8.5% in continental climates, and less for root crops. The authors also note that results depend on soil conditions and the microbe used, so treat it as an average from trials, not a promise for your field.

Does organic fertilizer use less fossil fuel?

It uses less fossil fuel as a feedstock, because manure and compost are not made through the Haber-Bosch process. But hauling and spreading bulky material takes diesel, and the low nutrient content per ton means more loads per acre. The honest comparison is per pound of nutrient delivered, which depends on your distance to the source. Livestock farms with manure on site are in the best position; crop farms far from animals may find the transport cost cancels the saving. A nutrient plan that credits manure nitrogen and phosphorus, and trims bought fertilizer to match, is the usual way to capture the benefit.

Chart

Average yield gain from biofertilizers, by climate

Percent yield increase over untreated controls, meta-analysis of 171 studies

What does a pound of nitrogen cost from each source?

Because products differ in strength, compare them by cost per pound of nitrogen, not per ton. The calculator turns your own local prices into a cost per pound and per acre for urea and poultry litter. Litter also carries phosphorus and potassium, which the calculator does not value, and it ignores spreading cost.

Try the numbers for your own farm below.

Fertilizer types, sources and impacts compared

Pounds of nitrogen for urea and ammonia are calculated from the percentages in the University of Minnesota note (2,000 lb times the percent). The other figures come from the Kentucky and Ohio State tables cited above and vary by sample, so test your own material.

Ways to use less purchased nitrogen

Use of any fertilizer, synthetic or organic, should follow the product label, your state’s nutrient rules and the advice of a certified crop adviser. The steps below are common agronomy options; the sources show their limits.

• Match the rate to the crop. A soil test and the crop’s removal rate beat a flat rate. Extension services in your state publish nitrogen guidelines for corn, wheat and other crops.
• Check your units. Minnesota Extension warns that entering product pounds where the controller expects nitrogen pounds can apply about a fifth more nitrogen than planned for anhydrous ammonia (its example enters 122 where 100 is meant) (University of Minnesota Extension).
• Protect urea from loss. The same source says urea left on the surface can lose nitrogen as ammonia gas in warm weather, and that incorporating it 3 to 4 inches deep within a couple of days, or using a urease inhibitor, helps.
• Blend sources. Many growers use manure or compost for part of the nitrogen and phosphorus and buy synthetic nitrogen to fill the gap.
• Handle ammonia safely. Anhydrous ammonia is hazardous and needs high-pressure equipment and training (University of Minnesota Extension).

Watching how the crop responds

After you apply nitrogen, you need to see whether the crop responds evenly. Satellite vegetation maps, such as those in the Farmonaut Satellite + AI Farm Monitoring System, show where plant cover differs across a field from week to week. They show vegetation change, not the cause, so pair them with a soil test or tissue test before changing your plan.

▶ A satellite view of crop health shows a corner of a field the farmer had missed. · 4:32

FAQ

Is fertilizer made from oil?

No. Nitrogen fertilizer is made from air plus natural gas or coal. Phosphate and potash are mined. Oil is linked mainly through sulfur recovered at refineries, fuel for transport, shared shipping routes and shared energy price swings.

Is fertilizer a petroleum product?

No. A petroleum product comes from crude oil. Fertilizer feedstocks are mainly natural gas, coal, air and mined rock or salt. Petroleum-fuel energy is used in moving and spreading it.

Is fertilizer a byproduct of crude oil?

No. The link runs the other way for one input: sulfur, used to make phosphate fertilizer, is a by-product of refining oil and processing natural gas (USGS, 2026).

Why do fertilizer prices rise when gas prices rise?

The World Bank calls natural gas the main production cost for nitrogen fertilizers. Higher gas prices raise the cost of making ammonia and urea. Supply and shipping disruptions can add to it, as in 2022 and 2026.

Can organic fertilizer replace synthetic nitrogen completely?

It depends on the crop, rate and nutrient plan. Manure and compost hold far less nitrogen per ton, and only part of it is available in year one, so they cover less of a high-demand crop like corn. Ask your extension office for crop-specific guidance.

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