Hormuz Disruption Drives Oil Above $90, Threatens Global Trade

The Strait carries a quarter of global seaborne oil trade, along with significant volumes of liquefied natural gas and fertilizers. This disruption drives higher energy, fertilizer, and transport costs, including freight rates, bunker fuel prices, and insurance premiums.

These increased costs will elevate food prices and intensify cost-of-living pressures, particularly for the most vulnerable populations. Similar repercussions occurred during the COVID-19 pandemic and the initial phase of the war in Ukraine, demonstrating how disruptions in energy, transport, and agricultural inputs propagate across interconnected markets.

This current shock impacts many developing economies already struggling with debt, tightening fiscal space, and limited capacity to absorb new price shocks. The overall global economic impacts depend on the duration and scale of the disruption; continued monitoring is crucial, especially for vulnerable economies.