The Strait of Hormuz remains virtually closed, with effects spreading through the global economy within weeks by disrupting energy flows, raising prices and increasing financial pressure on developing countries, UN Trade and Development (UNCTAD) warns in its second rapid assessment.
What began as a disruption in a key energy corridor is now feeding through the entire global economy.
- Energy corridor halted: The Strait of Hormuz remains “practically closed”, disrupting a critical share of global oil and gas flows.
- Trade losing momentum: Global merchandise trade is expected to slow sharply, from about 4,7% growth in 2025 to 1,5% to 2,5% in 2026.
- Inflation pressures rising: Energy shocks are pushing up prices and increasing the cost of living.
- Financial stress increasing: Investors are pulling back from developing countries, weakening currencies and raising borrowing costs.
- High vulnerability: 4-billion people live in countries already spending more on debt than on health or education.
The update follows an initial assessment issued on 10 March and confirms a rapid worsening of global conditions since the escalation at the end of February, with risks now extending well beyond energy markets.
A critical supply route at a standstill
The Strait of Hormuz, a central artery for global energy trade, has seen activity fall to a near halt. Ship transits dropped from around 130 per day in February to just six in March – a collapse of about 95%.
The disruption is hitting a large share of global oil and gas supplies, with immediate consequences for production, trade and consumption worldwide. It is also spilling over into transport systems, including maritime routes, air cargo and port logistics.