UNCTAD: Hormuz Closure Set to Halve Global Trade Growth as Supply Chains Cascade

What began as an energy chokepoint crisis has become a structural drag on the entire global economy, according to the United Nations' trade body — and maritime operators stand at the center of the transmission mechanism.

UNCTAD's second rapid assessment of the Strait of Hormuz disruption, published April 1, confirmed a rapid worsening of conditions since the February 28 escalation. Global merchandise trade growth is now projected to fall from approximately 4.7% in 2025 to between 1.5% and 2.5% in 2026 — a deceleration that, if it materialises, would represent the weakest trade expansion since the Covid-19 contraction year. Overall global GDP growth is expected to slow from 2.9% to 2.6%, with UNCTAD noting the downside risks are asymmetric: any intensification of the conflict, or damage to Gulf energy infrastructure, could push those figures considerably lower.

Ship transits through the strait fell from around 130 per day in February to just six in March — a 95% collapse that has choked approximately 21% of global oil trade and 25% of LNG volumes. The disruption is feeding through supply chains in three primary channels: elevated energy costs raising production costs worldwide; port and logistics congestion as cargo reroutes through Oman, the UAE's eastern seaboard, and land-bridge corridors; and surging shipping and insurance costs that have compounded the raw energy price increase.

Not all segments are equally exposed. Tankers — crude, product, and LNG — carry the most direct hit, facing both reduced volumes and elevated voyage costs. Container shipping is more insulated, but carriers with Middle East–sourced cargo legs are absorbing additional costs from Hormuz workaround routing, which the Container Magazine estimated adds 12–18 days and $800–1,200 per container equivalent on some trade lanes compared to direct Gulf transshipment.

Dry bulk has been affected more selectively. Capesize earnings have remained elevated — breaking $40,000 per day in late March driven by Brazil–China iron ore — partly because bulk trades are less directly dependent on Gulf routing. But the secondary effect of higher bunker costs (Brent above $100 per barrel since early March) is compressing margins for spot fixtures across all segments.

The financial market spillover documented by UNCTAD is less visible to operators but structurally important. Investors are selling down equity, bonds, and currencies in developing economies as risk appetite contracts — a dynamic that raises the cost of external financing for state shipping companies and port authorities in South Asia, Sub-Saharan Africa, and Southeast Asia. Countries more dependent on Middle Eastern energy imports face a double burden: higher import costs at the same time as capital outflows weaken their currencies.

The workaround economy is real but expensive. Cargo is moving through improvised land-bridge routes across Oman and the UAE's eastern coast — but with longer transit times, higher trucking and transhipment costs, and port congestion at Sohar, Salalah, and Jebel Ali's eastern operations. Container-mag.com reported that the container industry has "never had to construct an entirely land-bridged workaround at this scale in this region," describing the emerging logistics network as "expensive, congested, and slow — but functional."

What this means for operators: The UNCTAD data reinforces a shift in how the Hormuz crisis should be framed in commercial planning. This is no longer a near-term disruption to be waited out — it is beginning to reprice long-term trade lanes, insurance structures, and port infrastructure investment in ways that will persist even after passage reopens. Operators reviewing their network strategy should model not just the return to normal transit, but the permanent increase in routing optionality requirements and the risk that elevated fuel and insurance costs remain structurally higher for Persian Gulf trades through the end of 2026. Freight forwarders and charter parties are already renegotiating force majeure and deviation clauses; legal review of any long-term contract with Gulf port calls should be prioritised now.