MILITARY escalation in the Strait of Hormuz destabilizes energy markets and risks a hunger crisis for vulnerable economies, according to UN Trade and Development (Unctad).
The Strait of Hormuz serves as the world’s most critical oil transit chokepoint and the primary gateway between the Persian Gulf and the open ocean.
One-quarter of global seaborne oil trade and significant volumes of liquefied natural gas (LNG) pass through this corridor daily. Any friction immediately jeopardizes international energy security.
Immediate instability triggered volatile energy market reactions. Brent crude prices surged past $90 per barrel, a benchmark rippling through every economic sector. This spike compounded dramatic increases in "war risk" insurance premiums and tanker freight rates. As marine fuel costs rise, this "logistics tax" makes moving everything from consumer electronics to raw industrial materials more expensive.
Beyond energy, the disruption threatens global food systems. The Strait acts as a critical conduit for the fertilizer trade, carrying 16 million tons — one-third of the world’s seaborne supply — annually. For developing nations struggling with soil depletion and food scarcity, losing access to affordable fertilizers is catastrophic. Without these inputs, crop yields decline, leading to localized shortages and spiked commodity prices.
Developing economies face extreme exposure because they lack the fiscal cushions found in wealthier nations. Many navigate high debt burdens and soaring borrowing costs, leaving little room to subsidize fuel or food. As import costs rise due to Hormuz-related shipping delays, these states face a balance-of-payments crisis where the cost of essential survival exceeds national reserves.
The situation in the Strait of Hormuz requires a global economic contingency plan. The convergence of rising energy prices, fertilizer shortages, and debt distress creates a "perfect storm" that could reverse years of development progress. International cooperation must focus on keeping trade lanes open while providing targeted financial support to nations most at risk of falling through the cracks.
