The reopening of the Strait of Hormuz marks a pivotal moment for global trade, bringing an end to more than 100 days of severe disruption that rattled energy markets, disrupted shipping routes and sent shockwaves through economies around the world. While the restoration of maritime traffic offers immediate relief for international commerce and energy supplies, a new report from the United Nations Conference on Trade and Development (UNCTAD) warns that many of the disruption’s most damaging effects have already taken hold and will continue to shape the global economy long after ships begin moving normally again.
The report describes the reopening as the first step toward a gradual recovery of energy markets and international trade, but stresses that vulnerable economies now face a longer and more difficult path. Higher prices for oil, fertilizers and transportation have already filtered through supply chains, contributing to inflationary pressures that continue to affect households, businesses and governments. For many developing countries, particularly those with limited financial capacity, the costs of the disruption are expected to persist even as international markets begin to stabilize.
Daily ship transits through the Strait are now expected to return toward normal levels following the announcement of an agreement that includes the reopening of the strategic waterway. The disruption, which lasted for more than three months, significantly reduced maritime traffic through one of the world’s most important energy corridors before the agreement signaled the beginning of a recovery.
Energy markets responded quickly to the prospect of renewed shipping. According to the report, crude oil prices, which had climbed during the period of military escalation, began easing after the announcement that the Strait would reopen. The decline reflects expectations of improved energy flows and reduced uncertainty in global oil markets. However, UNCTAD notes that not every sector adjusts at the same pace. Freight costs, particularly in agricultural shipping, remain elevated, highlighting the slower recovery facing transportation networks and global logistics.
That uneven recovery is central to the report’s warning. While commodity prices may begin falling relatively quickly once supply disruptions ease, shipping systems, supply chains and production networks require considerably more time to recover. Higher transport costs continue to influence the price of goods moving across international markets, delaying broader economic normalization.
The report traces how the disruption spread far beyond energy markets. Reduced traffic through the Strait limited the availability of oil, gas and nitrogen-based fertilizers, increasing production costs across agriculture. Higher fuel prices also pushed up transport costs, contributing to wider inflation throughout the global economy. As farming became more expensive, food production costs rose, increasing the risk that domestic food prices would continue climbing. The report warns that these combined pressures heighten the risk of food insecurity and hunger, particularly among vulnerable populations.
Developing economies face the greatest exposure because many depend heavily on imported energy, imported food or both. UNCTAD identifies numerous least developed countries and small island developing states as particularly vulnerable to simultaneous shocks in oil and cereal prices. Several countries fall into a category of dual exposure, relying heavily on imports of both essential commodities while possessing limited economic buffers against sudden price increases.
Among small island developing states, dependence on imported petroleum products remains especially pronounced. In several cases, net oil imports account for a substantial share of gross domestic product, underscoring how rising energy prices can rapidly affect domestic economies. Many least developed countries also depend heavily on imported cereals, making them especially vulnerable when transport disruptions and higher production costs translate into more expensive staple foods.
The report argues that the ability to absorb these shocks varies sharply between countries. Many vulnerable economies entered the crisis with already constrained public finances, leaving governments with limited capacity to cushion rising costs for households or businesses. Existing debt-servicing obligations, exposure to exchange-rate risks linked to external borrowing, declining remittances and reductions in international development assistance have further narrowed available policy options. These structural challenges mean that even temporary external disruptions can produce lasting domestic consequences.
UNCTAD also points to evidence suggesting that energy shocks now generate more persistent inflation than they did before the COVID-19 pandemic. Analysis cited in the report indicates that increases in energy prices have a cumulative impact on consumer inflation over multiple quarters, reflecting the growing sensitivity of economies to disruptions in fuel markets.
Food prices present an additional concern. The report notes that food inflation has continued rising in many developing countries even after earlier declines in global oil and grain prices. Previous inflationary episodes linked to the pandemic, the war in Ukraine and climate-related shocks demonstrated that retail food prices often remain elevated long after underlying commodity prices begin to fall. The recent disruption in the Middle East, the report suggests, risks reinforcing those existing pressures.
The implications extend beyond markets and government budgets to households and public health. Rising food prices reduce affordability at a time when many families are already facing financial pressure. The report highlights research showing that even relatively modest increases in real food prices are associated with higher risks of child wasting, a form of acute malnutrition strongly linked to early childhood mortality. The greatest risks are concentrated among poor households, rural landless families and children under the age of five.
Although the reopening of the Strait provides a foundation for recovery, UNCTAD emphasizes that normalization will not occur immediately. International energy prices may stabilize relatively quickly, but shipping networks and global value chains require more time to adapt. Countries heavily dependent on imported oil remain particularly exposed to domestic inflationary pressures, while earlier increases in agricultural input costs continue to pose risks for food production. The report also notes that an expected strong El Niño adds another layer of concern for future food security.
Looking ahead, the report identifies international support as an important component of recovery for vulnerable economies. It points to declining official development assistance and mounting debt-servicing burdens as factors that could slow progress, while also highlighting the importance of strengthening resilience through more diversified trade sources and other domestic measures where financial resources permit.
The report concludes that the reopening of the Strait of Hormuz represents an important milestone for global trade, but not the end of the crisis. After more than 100 days of disruption, the immediate obstacle to shipping may be easing, yet the economic consequences are expected to continue unfolding across vulnerable economies for months to come as governments, markets and households adjust to the lasting effects of the shock.
