The reopening of the Strait of Hormuz has removed concerns of energy shortages globally, but the aftermath of the crisis will be felt for months, especially by vulnerable economies, according to a report by the United Nations Conference on Trade and Development (UNCTAD).
Though oil prices have declined to pre-war levels, the shipping operations, logistics, supply chains and inventory cycles would need some time to adjust, meaning transportation costs will remain high even as crude prices decline.
The shock extends beyond oil and natural gas markets, as low-income countries face inflation which threatens food security and incomes amidst economic instability.
As food prices respond more slowly than the energy sector, several countries will face increasing costs of living, which will affect poor-income households the most, leading to malnutrition, diseases and health issues.
Nations which solely depend on fuel, food and fertiliser imports would be impacted, given the limited financial resources and dependence on external supplies, which would leave them with fewer options but to bear the high import costs.
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