The consequences are being felt far beyond the Middle East, with UN agencies warning that rising fuel prices, disrupted shipping routes and growing financial uncertainty are putting increasing pressure on economies, labor markets and vulnerable households across Asia and other developing regions.
Before the latest tensions, the Strait of Hormuz handled about a fifth of global oil supplies – around 20 million barrels per day – along with large quantities of liquefied natural gas (LNG) and raw materials for critical industries, making it one of the world’s most important maritime chokepoints.
Boat traffic during the last week It fluctuated between just two and 16 ships per day, far below the more than 100 ships that normally transited daily before the crisis..
The Strait of Hormuz is a narrow but vital shipping route linking the Persian Gulf with the Gulf of Oman and the wider Arabian Sea. It is located between Iran to the north and Oman and the United Arab Emirates to the south.
Global growth and trade stagnation
The sharp decline has driven up oil and gas prices, disrupted supply chains and increased transportation and insurance costs around the world, with markets nervously reacting to the daily uncertainty.
Global growth is now forecast to slow to 2.5 percent in 2026, well below pre-pandemic levels.according to a report released Tuesday by economists at UNCTAD, the U.N. trade and development body.
Global trade growth is also expected to weaken markedly after a strong performance last year.
Inflation rises across Asia
He Asia’s economic outlook has deteriorated rapidly since the crisis intensified.driving inflation and weakening consumer confidence in several countries, according to the UN regional economic commission, ESCAP.
In the Lao People’s Democratic Republic, headline inflation – which measures overall consumer prices – rose from 6.2 percent in February to more than 10 percent in April. Pakistan also saw inflation rise from 7.3 percent in March to 10.9 percent in April.
East Asia – the region’s economic engine – is also expected to slow, with growth forecast to slow from 5.0 percent in 2025 to 4.4 percent in 2026, as higher energy costs and trade uncertainty cloud the outlook.
Families in Myanmar have been hit hard by rising prices, with the most vulnerable struggling to meet their daily needs.
Currencies weaken
Several regional currencies have weakened against the US dollar, while borrowing costs have risen as investors reassess risks.
In Nepal, for example, one US dollar was trading at around 154.5 rupees on Tuesday (almost 10 rupees higher than in early February), sharply increasing import costs in an economy that relies heavily on imports.
ESCAP warned that many developing countries have fuel reserves that cover less than three months of imports, raising the risk of deeper supply pressures if instability persists.
He also warned that A prolonged crisis could trigger economic disruptions comparable to the 1973 oil crisis.including risks of recession and double-digit inflation in vulnerable economies.
Myanmar families in distress
The impact is already visible in countries facing existing humanitarian and economic crises.
In Myanmar, where conflict and displacement have already devastated livelihoods, fuel prices have tripled across the country since late February and the cost of a basic food basket has skyrocketed.
“One in four people in Myanmar is acutely food insecure.” says the UN World Food Programme, warning that rising fuel and fertilizer prices are threatening both household survival and the upcoming monsoon planting season.
UN News spoke to Michael Dunford, the agency’s country director in Myanmar, about the impact on vulnerable communities. Listen to the interview here.
Labor markets under pressure
The International Labor Organization (ILO) warned that the crisis was increasingly affecting jobs, wages and working conditions around the world through higher energy costs, weaker tourism, disrupted migration and a slowdown in trade.
“Beyond its human cost, the Middle East crisis is not a short-lived disturbance,“said Sangheon Lee, chief economist at the UN agency.”This is a slow and potentially long-lasting shock that will gradually reshape labor markets.“
Under a scenario modeled by the agency – in which oil prices remain about 50 percent above their early 2026 average – global working hours could fall by 0.5 percent this year and 1.1 percent in 2027, equivalent to approximately 14 million and 38 million full-time jobs, respectively.
Livelihoods at stake
Real labor income could decline by up to $3 trillion globally by 2027the ILO estimated, with Asia-Pacific and the Arab States among the most exposed regions due to their dependence on energy flows, sea routes and labor migration from the Gulf.
The agency also warned that labor shipments to Gulf countries had already declined sharply in several labor-sending economies, while remittance flows – a vital source of income for millions of families – are weakening.
“If the crisis disrupts both deployments and remittance flows, The effects could extend to consumption, poverty and local employment in the countries of origin,”warned the ILO.
ESCAP notes that the crisis has exposed a broader lesson for an increasingly volatile global economy: Countries that invest in resilience and prepare for energy and supply shocks are better positioned to withstand future shocks. – whatever the drivers.