Despite a fragile ceasefire between the United States and Iran, sporadic hostilities and continued uncertainty in the Strait of Hormuz – one of the world’s most important energy and maritime corridors – continue to impact global supply chains, raising transportation and fuel costs and straining aid operations that already face serious funding shortfalls.
Real consequences
Speaking at UN headquarters in New York on Thursday, World Food Program (WFP) acting executive director Carl Skau said warnings issued earlier during the crisis about the knock-on effects of higher energy prices were now materializing in some of the world’s most vulnerable countries.
“Just to illustrate that what we are warning about now is unfolding in real time in many of these contexts,“he told reporters.
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.
hunger increases
Several weeks ago, the WFP warned that if oil prices remained above $100 a barrel through July, up to 45 million more people could be pushed into hunger due to the close relationship between energy and food prices.
That pressure is already increasing: another 2.5 million people in Somalia have been acutely food insecure, while another 2.3 million people have been pushed into acute hunger in Afghanistan and another 1.3 million in Sri Lanka.
The drivers differ from country to country, Skau said, but include Rising food prices, underfunded humanitarian responses and markedly higher operational costs. that reduce the number of people that aid agencies can reach with the resources available.
The long-term prospects are equally worrying.
Skau warned that higher fertilizer costs could reduce agricultural productivity in East Africa during the upcoming planting season, echoing disruptions seen after Russia’s invasion of Ukraine in 2022 and raising the prospect of additional food shortages within months.
missed deliveries
The effects are increasingly visible in humanitarian supply chains.
The United Nations Children’s Fund (UNICEF) warns that maritime diversions around the Cape of Good Hope are adding two to four weeks to shipping times, while air cargo capacity on Middle East routes has been reduced and congestion is spreading to ports in Africa and elsewhere.
“Rising transportation costs mean less money for the vital supplies children need,”said Jean-Cédric Meeus, Head of Global Transport and Logistics at UNICEF.
“What begins as a disruption of shipping routes can turn into a humanitarian crisis.”
Women and children at a health center in southern Somalia. Failed crops and conflict have displaced millions of people across Somalia, leaving them dependent on humanitarian assistance.
Prices of life-saving aid soar
According to UNICEF, air transport costs for vaccines sent from India to Ethiopia, Nigeria and the Democratic Republic of the Congo (DRC) have increased by up to 70 percent. Road transport costs for life-saving therapeutic foods destined for Somalia, South Sudan and the Democratic Republic of the Congo have also increased by a third.
Sea transportation costs for educational materials destined for Yemen and Mozambique have increased by up to 150 percent.
UNICEF estimates that supply disruptions could delay critical humanitarian cargo by four to six months.
“For a child in a crisis zone, delays in the arrival of vaccines or nutritional interventions can mean the difference between life and death.”Mr Meeus warned.
‘I’ve never seen anything like it’
Few places illustrate the cascading consequences more clearly than Afghanistan.
Having just arrived from a visit to the country, Mr. Skau described witnessing Hundreds of mothers carried visibly malnourished children outside a rural health clinic near Jalalabad because nutritional supplies had run out..
The shortage is due to a combination of funding cuts and supply chain disruptions that have complicated deliveries that were previously made through neighboring countries.
“I’ve never seen anything like it,“said Mr. Skau.”The desperation in that clinic is difficult to describe.“
Afghanistan is simultaneously facing economic pressures linked to the regional crisis and the return of some 2.8 million people deported or repatriated from neighboring countries over the past year.
The most vulnerable economies and their inhabitants are exposed to the oil shock.
terrible strait
The humanitarian consequences are part of a broader economic shock.
Before the escalation began on February 28, about a fifth of global oil shipments passed through the Strait of Hormuz.
Since then, the disruptions have driven up crude oil prices and increased costs in transportation networks and supply chains. Hundreds of ships and tens of thousands of sailors remain stranded.
A new analysis by the United Nations trade and development body UNCTAD warns that the burden is falling disproportionately on poorer countries.
Of the 75 vulnerable economies studied, 65 are net oil importers. Together, they are home to nearly one billion people, more than 30 percent of whom live on less than $3 a day.
UNCTAD estimates that A sustained 50 percent rise in refined oil prices would add more than $20 billion annually to their collective import bill.. For some countries, including Mauritania, Gambia, Vanuatu, Maldives and Burkina Faso, additional costs could exceed five percent of national economic output.
I told you
The developments reflect concerns previously raised by Secretary-General António Guterres in April, when he warned that even in the most optimistic scenarioDisruptions in the Strait of Hormuz would depress economic growth, increase inflation, and disrupt global trade.
He warned that a prolonged crisis could push millions more people into poverty and hunger while reversing hard-won development gains.
The ceasefire – although fragile – has reduced fears of an immediate military escalation.
However, many of the consequences outlined by Guterres are already emerging: higher food and transportation costs, disrupted supply chains, growing pressure on vulnerable economies, and growing humanitarian needs.
As Mr. Skau said, The consequences that agencies warned about weeks ago are now unfolding in real time.