By Ukumbi Afrika Although shipping through the Strait of Hormuz has resumed and global oil prices have eased, the United Nations is warning that many developing economies—particularly those heavily dependent on imported fuel and food—could continue to face rising costs and prolonged economic pressure.
The United Nations Conference on Trade and Development (UNCTAD) has cautioned that the reopening of the Strait of Hormuz is unlikely to bring immediate relief to many vulnerable economies, despite a rapid recovery in global energy markets.
In a new report, UNCTAD said that while oil prices have largely returned to pre-conflict levels following the interim agreement between the United States and Iran, disruptions to food supply chains and transport networks could continue to affect developing countries long after energy markets stabilise.
The Strait of Hormuz, through which approximately 20% of global oil and natural gas supplies normally pass, experienced more than 100 days of severe disruption following the conflict that erupted after joint U.S.-Israeli military strikes on Iran earlier this year.
Although Brent crude has fallen to around US$73 per barrel, easing immediate concerns over global energy supplies, UNCTAD warned that higher fuel, natural gas and fertiliser costs have already filtered through supply chains, increasing agricultural production costs, transport expenses and household living costs.
The agency noted that vulnerable economies remain particularly exposed to fluctuations in oil and fertiliser prices, with sustained increases in food prices posing serious risks to low-income households. According to UNCTAD, even a 5% increase in food prices can significantly heighten the risk of childhood wasting in economically fragile countries.
The report identifies 61 vulnerable economies facing heightened exposure to oil and cereal import disruptions linked to the Strait of Hormuz crisis.
Among them is Cape Verde, where heavy dependence on imported fuel has contributed to higher electricity, transport and food costs. Even as international energy markets recover, these domestic cost pressures may persist due to delays in restoring disrupted supply chains.
Countries that rely heavily on imported staple foods, including Yemen, also remain at considerable risk. UNCTAD warned that fragile economies often lack the fiscal capacity to absorb prolonged increases in grain prices and shipping costs, leaving millions vulnerable to worsening food insecurity.
The agency called for coordinated international support to help the most exposed countries strengthen supply chain resilience, stabilise food systems and cushion vulnerable households against future external shocks.
The Strait of Hormuz remains one of the world’s most strategically important maritime trade corridors, and disruptions there have consequences far beyond global oil markets. For many African economies that depend heavily on imported fuel, fertilisers and food, prolonged supply chain disruptions can fuel inflation, increase public expenditure and slow economic growth. The episode also underscores the importance of strengthening regional food production, expanding energy security and building more resilient supply chains across the continent.
Source: Reuters
Reporting: Olivia Le Poidevin.