The Strait of Hormuz is one of the world’s most critical maritime chokepoints, carrying around a quarter of global seaborne oil trade and significant volumes of liquefied natural gas and fertilisers. 

The ongoing military escalation in the region has disrupted shipping flows through this narrow passage. The resulting ripple effects go far beyond the region, affecting energy markets, maritime transport and global supply chains.

These developments raise concerns for global trade and development prospects. Oil markets have reacted quickly, with Brent crude prices now rising above $90 per barrel. 

Higher energy, fertiliser and transport costs – including freight rates, bunker fuel prices and insurance premiums – may increase food costs and intensify cost-of-living pressures, particularly for the most vulnerable.

Similar repercussions were observed during recent global shocks, including the COVID-19 pandemic and at the beginning of the war in Ukraine, which showed how disruptions in energy, transport and agricultural inputs can propagate across interconnected markets.

The current shock comes at a time when many developing economies struggle to service their debt, tightening fiscal space and limited capacity to absorb new price shocks.

While the overall global economic impacts will depend on the duration and scale of the disruption, the situation highlights the importance of continued monitoring, particularly implications for vulnerable economies.

Report by the United Nations Conference on Trade & Development