UN warns of potential global trade disruptions if Strait of Hormuz is closed

The UN on Tuesday warned of severe global economic consequences if the Strait of Hormuz is closed.

Citing a new report by the UN Trade and Development (UNCTAD), UN spokesperson Stephane Dujarric told a news conference that the potential impact of a closure of the Strait of Hormuz would pose "significant risk to Global Trade and Development."

"The report underscores that the Strait of Hormuz is a critical maritime checkpoint carrying about a quarter of the global seaborne oil and roughly 1/3 of the global fertilizer trade," Dujarric said, adding that this includes "about 16 million tons of fertilizer annually."

Pointing to the recent rise in Brent crude oil prices, which surged above $90 per barrel due to regional instability, he said: "Since Feb. 28, according to UNCTAD, ship traffic through the Strait of Hormuz has dropped by 97%."

The UNCTAD report warned that such disruptions could escalate food prices and put additional pressure on living costs, particularly for vulnerable populations.

"The ultimate scale of the economic impact will depend on the duration and intensity of disruption," Dujarric noted, urging continued monitoring to protect vital trade routes.

The Strait of Hormuz has been at the center of energy market concerns since Iran's Islamic Revolutionary Guard Corps (IRGC) announced its closure to transit amid the US-Israeli attacks against Iran, which continue since Feb. 28.

Around 20 million barrels of oil pass through the waterway daily, and its disruption has pushed up oil prices.

US authorities have implemented political risk insurance for tankers operating in the Persian Gulf and have indicated that the US Navy could escort shipments if necessary, though no such escorts had been confirmed.

Trump said on Monday that Iran will be hit 20 times harder if it does anything to stop the flow of oil.