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UNCTAD: Hormuz Chokes Trade Flows, Economies

[ April 10, 2026   //   Gary Burrows ]

A near shutdown of the Strait of Hormuz is rapidly spreading strain across the global economy, hitting trade flows, driving up prices and tightening financial conditions, according to a new assessment from UN Conference on Trade and Development, or UNCTAD.

In its latest update released April 1, UNCTAD said activity through the vital energy corridor has “fallen to a near halt,” with daily ship transits dropping about 95 percent from February levels. The strait is a critical route for global oil and gas shipments, and the disruption is already pushing up fuel costs and transport rates worldwide.

The agency said the shock is feeding through supply chains, raising production and shipping costs and adding to inflation pressures. Oil and liquefied natural gas shipping have been hit hardest, though broader maritime and logistics networks are also seeing knock-on effects.

UNCTAD now expects global merchandise trade growth to slow sharply in 2026, to between 1.5 percent and 2.5 percent, down from an estimated 4.7 percent in 2025, as higher costs and uncertainty weigh on demand.

“The disruption is acting as a global supply shock,” the report said, warning that prolonged instability could keep energy prices elevated and further weaken trade and economic growth.

Financial markets are also showing signs of stress. Investors are pulling back from developing economies, driving down currencies and pushing up borrowing costs across regions including Africa, Latin America and parts of Asia, UNCTAD said.

That shift is making imports such as fuel and food more expensive while limiting governments’ ability to respond, particularly in countries already facing high debt burdens. UNCTAD estimates billions of people live in economies where debt servicing exceeds spending on health or education.

The agency warned that the combination of disrupted energy flows, rising prices, slowing trade and tighter financial conditions could evolve into a broader global crisis if the situation persists.

While the outlook depends on how long the disruption lasts, UNCTAD said risks are rising quickly and extending well beyond energy markets, with the potential to weigh on growth, increase living costs and deepen vulnerabilities across developing economies.

Tags: UN Conference on Trade and Development