UN Warns Strait of Hormuz Closure Could Trigger Food Price Surge and Living Cost Crisis

United Nations, Mar 11: The United Nations has cautioned that a potential shutdown of the Strait of Hormuz amid escalating tensions in West Asia could trigger higher food prices and intensify global cost of living pressures.

Vital Global Shipping Route at Risk

In a report released on Tuesday, the UN Conference on Trade and Development (UNCTAD) highlighted that military escalation following US-Israel strikes on Iran and Tehran’s retaliation has already disrupted shipping flows through the narrow waterway.

The Strait of Hormuz is one of the world’s most crucial maritime routes, carrying roughly a quarter of global seaborne oil trade, along with large volumes of liquefied natural gas and fertilisers. According to the report, disruptions in this passage could send shockwaves through energy markets, shipping networks and global supply chains.

Rising Energy Costs Could Hit Food Prices

The UN agency warned that increasing costs for energy, fertilisers and transportation could eventually raise food prices worldwide. Higher freight rates, bunker fuel costs and insurance premiums for shipping may further aggravate living expenses, particularly for vulnerable populations.

UN Secretary General Antonio Guterres’ spokesperson Stéphane Dujarric said the UNCTAD analysis underlines the significant risks such disruptions pose to global trade and development.

Trade and Supply Chains Face Uncertainty

UNCTAD noted that maritime chokepoints like the Strait of Hormuz remain highly vulnerable to geopolitical tensions. Ensuring safe navigation and protecting ports, ships and seafarers is essential to keep global trade routes functioning in line with international law.

The agency added that the economic impact will largely depend on how long the conflict continues and how widely it spreads. Continuous monitoring of the situation is therefore necessary to assess evolving risks.

Asia Most Exposed to Energy Disruptions

Data cited in the report shows that about 20 million barrels of oil per day passed through the strait in 2024, representing nearly 25% of global seaborne oil trade. Of this volume, 84% was destined for Asian markets, making the region particularly vulnerable to supply disruptions.

Similarly, more than 80% of liquefied natural gas shipments moving through the strait are bound for Asia. The route also handles around one-third of global seaborne fertiliser trade, making it vital for agricultural supply chains.

Developing Nations Face Greater Pressure

The UN agency warned that many developing economies are already struggling with heavy debt burdens and limited fiscal capacity. A spike in energy, transport and food prices could strain government finances and household budgets further, potentially slowing progress toward sustainable development.

UNCTAD stressed that de-escalation of tensions and the protection of international trade routes are critical to preventing wider economic shocks.