Geneva: The United Nations Conference on Trade and Development (UNCTAD) expressed concern Tuesday over the repercussions of the disruption of navigation in the Strait of Hormuz on sectors such as energy and fertilisers, noting that the impact of the new reality may be severe on developing countries in particular.
In its latest report, UNCTAD explained that the situation raises concern about ripple effects across energy markets, maritime transport and global supply chains, pointing out that freight rates for oil tankers and war risk insurance premiums are surging, while marine fuel costs are also rising, increasing shipping costs across supply chains.
Developing economies are particularly vulnerable, given their limited capacity to absorb new price shocks due to their high levels of indebtedness and increased interest on borrowing, it said, noting that around one third of global seaborne fertiliser trade (about 16 million tonnes) passes through the Strait, raising concerns about fertilizer access for some of the poorest countries.
Meanwhile, the World Food Programme warned of a new turning point in the history of global supply chains, with implications for the economy, food security and humanitarian aid.
Similar repercussions were observed during recent global shocks, including the COVID-19 pandemic on the Russia's military operation in Ukraine in 2022, which showed how disruptions in energy, transport and agricultural inputs can propagate across interconnected markets.
