The closure of the Strait of Hormuz is placing nearly one billion people at risk of rising living costs and economic hardship, with the United Nations warning that the disruption is hitting some of the world’s poorest and most vulnerable countries the hardest.
According to a new report from the United Nations Conference on Trade and Development (UNCTAD), 65 of the world’s 75 least developed countries (LDCs) and small island developing states (SIDS) depend heavily on imported oil. As energy prices climb following the shutdown of the vital shipping route, these nations are facing growing financial strain and difficult policy choices.
“Disruptions in the Strait of Hormuz are sending shockwaves through the global energy system,” the report said, noting that vulnerable economies are on the front line of the crisis. For many governments, rising fuel costs are forcing trade-offs between paying for energy imports and maintaining spending on essential public services and development projects.
The 21-mile-wide Strait of Hormuz has been effectively closed since March 4, 2026, amid the ongoing conflict involving the United States, Israel and Iran. The waterway normally handles around one-fifth of global oil supplies, or roughly 21 million barrels per day. Its closure has sharply reduced energy shipments, driving oil and gas prices higher and raising fears of a major global energy shock.
The impact is being felt far beyond energy markets. Higher oil prices have increased transportation and freight costs, contributing to broader inflation across many economies. Sultan Ahmed Al Jaber, the UAE’s Minister of Industry and Advanced Technology and Group CEO of ADNOC, said the disruption has contributed to a more than 20 percent rise in airfares, a 50 percent increase in fertilizer prices and an increase of over 30 percent in oil prices.
UNCTAD said countries that rely heavily on imported fuel are particularly vulnerable because higher energy costs quickly translate into more expensive goods and services. For poorer nations, the resulting pressure on government finances can widen trade deficits, weaken currencies and lead to tighter credit conditions, slowing economic growth.
The report estimates that the closure could add approximately $20 billion annually to import costs based on 2024 trade levels. Of that total, least developed countries account for $15.7 billion in additional costs, while small island developing states face an estimated $4.3 billion burden.
Among the countries expected to be most affected are Mauritania, Gambia, Burkina Faso, Liberia, Zambia, Lesotho, Mali, the Central African Republic, Myanmar, Cambodia and Mozambique. Small island states facing significant challenges include Vanuatu, the Maldives, Tonga, Mauritius, Fiji, Samoa, Jamaica, Saint Lucia, Belize and the Marshall Islands.
The United Nations warned that many of the nearly one billion people affected already live on less than $3 a day, making them especially vulnerable to prolonged increases in energy and consumer prices.
