Disruptions in the Strait of Hormuz are increasing global energy costs and adding more than US$20 billion annually to oil import bills for vulnerable economies, according to a new United Nations trade report.
The United Nations Conference on Trade and Development (UNCTAD) said rising geopolitical tensions and repeated disruptions in the key shipping corridor have significantly increased crude oil and fuel prices, intensifying pressure on import-dependent countries already facing fiscal strain and debt vulnerabilities.
The Strait of Hormuz, one of the world’s most strategic energy chokepoints, historically carried about one-fifth of global oil supplies. According to UNCTAD, disruptions linked to recent geopolitical tensions involving Iran and the United States–Israeli alliance have contributed to sustained volatility in global energy markets since early 2026.
The report found that 75 vulnerable economies including 65 net oil importers are being disproportionately affected by the price increases. These countries collectively account for nearly one billion people, with more than 30 percent living on less than US$3 a day.
Refined petroleum products make up about 97.8 percent of their net fuel imports, leaving them heavily exposed to price fluctuations in global oil markets.
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UNCTAD estimates that least-developed countries will bear roughly $16 billion of the additional annual costs, while small island developing states will absorb about US$4 billion.
The impact varies significantly by country. In some cases, the rise in fuel import costs is equivalent to more than 5 percent of gross domestic product, including Mauritania (7.3 percent), The Gambia (6.3 percent), Vanuatu (5.8 percent), the Maldives (5.2 percent) and Burkina Faso (5 percent).
The report warned that the energy shock is not only increasing import bills but also feeding broader macroeconomic pressures.
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Higher fuel prices are raising transportation and freight costs, accelerating inflation, reducing household purchasing power and tightening fiscal space in countries already struggling with debt sustainability challenges.
Economic growth prospects in the most exposed economies are also expected to weaken as higher energy costs ripple through production and trade systems.
UNCTAD noted that many developing economies remain heavily reliant on fuel imports from Gulf producers, limiting their ability to quickly diversify supply chains in response to disruptions.
Some countries are attempting to reduce exposure through domestic refining and regional energy integration initiatives.
The report highlighted Nigeria’s Dangote refinery as an example of emerging capacity expansion in Africa. The facility, located in Lekki, has a capacity of 650,000 barrels per day and began operations in 2024.
However, UNCTAD noted that most of its output is intended for domestic consumption, limiting its immediate ability to significantly alter regional supply dynamics.
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Over the medium term, the agency said improving resilience will depend on diversifying energy sources, expanding strategic fuel reserves and enhancing preparedness for future supply shocks.
It also called for stronger early-warning systems to anticipate disruptions in global shipping routes and reduce the economic fallout from geopolitical instability.
UNCTAD warned that persistent tensions in key maritime corridors are reshaping global energy markets in ways that could have long-term consequences for developing economies, particularly those with limited fiscal buffers and high dependence on imported fuel.
