Geneva, June 3 (SANA) The closure of the Strait of Hormuz could significantly increase economic pressures on nearly 1 billion people living in vulnerable economies, the United Nations Conference on Trade and Development (UNCTAD) said in a report released on Tuesday.
UNCTAD said least developed countries and small island developing states were among the most exposed to disruptions in global energy markets, noting that 65 of the 75 economies in those categories depend on imported oil.
The report warned that higher energy prices could force governments to make difficult trade-offs between covering fuel costs and maintaining spending on essential public services.
According to UNCTAD, a 50% increase in oil prices would raise annual oil import costs for fragile economies by about $20 billion, based on 2024 price levels.
The agency said rising import bills could widen current account deficits, weaken national currencies and contribute to higher borrowing costs, tighter credit conditions and slower economic growth, particularly in countries with limited fiscal capacity.
The warning comes as global markets face heightened volatility linked to the U.S.-Israeli-Iranian conflict, which has contributed to increases in oil prices and inflationary pressures.
Around 20 million barrels of oil pass through the Strait of Hormuz each day. The closure of the strategic waterway at the outset of the conflict increased shipping and insurance costs and drove crude prices higher, fueling concerns over potential repercussions for the global economy.
N.J/ABD
