Page 11 - Policy Economic Report - March 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Higher energy, fertilizer, and transport costs – including freight rates, bunker fuel prices and insurance
premiums – may increase food costs and intensify cost-of-living pressures, particularly for the most
vulnerable.

Figure 5: Monthly food price index and crude oil prices, January 1990 to February 2026

Source - UNCTAD

While the overall global economic impacts will depend on the duration and scale of the disruption, the
situation highlights the importance of continued monitoring, particularly implications for vulnerable
economies.

Key implications and considerations

? Disruptions in the Strait of Hormuz underscore the vulnerability of critical maritime chokepoints
to geopolitical tensions and their potential to transmit shocks across supply chains and
commodity markets.

? Reducing risks to global trade and development, including environmental risks, requires de-
escalation and safeguarding maritime transport, ports and seafarers, and other civilian
infrastructure.

? Socio-economic implications for developing economies: Many developing countries already
face high debt service burdens, limited fiscal space and constrained access to finance. In this
context, rising energy, transport and food costs could strain public finances and increase
pressure on household budgets, potentially heightening economic and social pressures and
complicating progress toward sustainable development, particularly in economies heavily
dependent on imported energy, fertilizers, and staple foods.

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