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Strait of Hormuz closure affects 1 billion lives, says UN
65 out of 75 least developed economies and small island states depend heavily on the crude oil imported through the Strait of Hormuz, says UNCTAD
- PUBLISHED: Sun 7 Jun 2026, 9:58 AM
The closure of the Strait of Hormuz is affecting nearly one billion lives, as 65 of the 75 least developed countries and small island states depend on imported oil, according to the United Nations.
"Disruptions in the Strait of Hormuz are sending shockwaves through the global energy system. Vulnerable economies are on the front line. Of 75 economies – least developed countries (LDCs) and small island developing States (SIDS) – 65 depend on imported oil. For these countries, rising energy prices will translate into higher costs and difficult trade-offs – between covering fuel bills and investing in essential public services. This will affect nearly one billion lives," said the Strait of Hormuz Disruption report issued by the UN Conference on Trade and Development.
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The Strait of Hormuz, the 21-mile-wide chokepoint, has been effectively closed since March 4, 2026, making this the first closure of the waterway in history. The shutdown, triggered by the ongoing US-Israel-Iran conflict, has sent shockwaves through the global economy: oil and gas shipments representing roughly 20 per cent of the world's oil supply and 21 million barrels per day have been choked off, causing oil prices to spike sharply and pushing the world toward a 1970s-style energy shock.
Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and Managing Director and Group CEO of Adnoc, has also said that the Hormuz closure has resulted in over a 20 per cent jump in airfares, a 50 per cent increase in fertilizer prices, and over 30 per cent in oil prices.
Higher oil prices drive up freight and fuel costs, pushing the overall price of goods higher. Vulnerable economies that depend heavily on fuel imports feel the impact most acutely, as rising oil prices rapidly translate into a higher cost of living. Even net oil-exporting nations are not immune, as broader inflationary pressures can ripple across their economies as well.
For net-importing vulnerable economies, oil price shocks intensify fiscal pressure, forcing governments to choose between protecting households from rising energy costs and maintaining essential public services and long-term development investments. Surging oil import bills can also widen current account deficits and weaken national currencies, prompting higher interest rates and tighter credit conditions. The combined effect slows economic growth, hitting hardest in countries with little fiscal room to absorb the shock.
According to the UN, one billion affected people live below the extreme poverty line of $3 per day.
It added that the vulnerable economies import 97.8 per cent of refined oil products and 2.2 per cent crude oil.
The UN report elaborated that the Strait of Hormuz closure raises the cost of importing by $20 billion a year, based on 2024 figures, with least developed countries accounting for $61.1 billion and small island developing states at $4.3 billion.
The most impacted least developed countries include Mauritania, Gambia, Burkina Faso, Liberia, Zambia, Lesotho, Mali, the Central African Republic, Myanmar, Cambodia, and Mozambique.
Among the small island developing states, Vanuatu, Maldives, Tonga, Mauritius, Fiji, Samoa, Jamaica, Saint Lucia, Belize, and the Marshall Islands have been the most impacted due to higher oil prices.
