Its immediate effect is visible Currency pressures and financial market instability as well as sharp increases in transportation costs, energy and fertilizer prices.
“The most immediate economic impact…is a significant increase in Freight costs and oil, gas and fertilizer prices“Hamza Ali Malik, Director of the Macroeconomic Policy Division at the Asia-Pacific Development Branch of the United Nations (escape) told united nations news.
He warned that there was a possibility of higher inflation, weaker exports and rising credit risks.
Waves of the Strait of Hormuz
The total number of daily ships passing through the Strait of Hormuz.
At the center of the disruption is the Strait of Hormuz, one of the world’s most important maritime chokepoints.
narrow path leads around a quarter of the global seaborne oil tradewith significant amounts of liquefied natural gas And fertilizer. The escalating hostilities have halted ship transit, triggering immediate reactions in global energy markets.
Volatile Brent crude oil prices have surged above $100 a barrel, while higher transportation and insurance costs are adding to the strain.
These shocks are resonating through supply chains and raising concerns not only for trade and development, but also for humanitarian aid and the delivery of essential goods.
The supply chain is under pressure
Its impact is being felt across all sea routes, with major shipping companies suspending services to the Middle East and containers stranded in congested ports. At least 20,000 sailors in the region are also affected.
“there are Important early signs of disruption to shipping routes“This is already having an impact on key industries,” said Rupa Chanda, director of the trade division at ESCAP.
Shortage of helium and specialty gases from the Gulf is creating an “almost immediate crisis” for semiconductor and advanced electronics production, while disruptions in petrochemical feedstocks threaten manufacturing in major Asian economies.
Fertilizer shortages are raising concerns about future crop yields across South Asia – home to nearly two billion people – and beyond.
People queuing to fill gas cylinders in Colombo, Sri Lanka. (file photo)
Rising prices affect homes
Rising energy prices are directly impacting inflation and cost of living.
UN estimates indicate that oil prices have increased by about 45 percent and gas prices by 55 percent since the end of FebruaryFertilizer prices increased by 35 percent. Regional inflation could rise from 3.5 percent in 2025 to 4.6 percent in 2026.
In many countries, high fuel prices are already driving up transportation, production and food costs, hitting poor households the hardest.
Country-level impacts are intense
In Sri LankaWhere petroleum accounts for about a quarter of total imports, authorities have introduced fuel rationing and cut public programs to conserve supplies. Schools have shifted to a four-day week, while public sector operations have been scaled back.
In PakistanFuel and grocery prices rose overnight, and long queues formed at petrol stations. Authorities have introduced fuel conservation measures, including four-day work weeks, school closures and work-from-home policies.
crisis hit myanmar We are also facing intense pressures. Fuel shortages have led to strict rationing, disrupting transportation, business, and humanitarian work.
“These disruptions are adding new stress to Myanmar’s economy It was already under pressure,” said Gwyn Lewis, interim UN Resident and Humanitarian Coordinator. “Prices are rising, essential goods have become harder to find, and the purchasing power of families continues to decline.”
Migrant workers wait outside Tribhuvan International Airport in Kathmandu before departing for work in the Middle East. (file photo)
From economic shock to domestic crisis
In NepalThe crisis is being felt not only in economic terms, but also in daily life. At least one migrant worker has been killed, dozens injured and thousands stranded in the Gulf – Unable to return home or travel to workplaces.
More than 1.7 million Nepali migrants work in the Gulf, accounting for more than 65 percent of foreign labor migration. Remittances – most of them from the Gulf – make up more than a quarter of Nepal’s GDP and support about 6 in 10 households.
International Labor Organization (ILO)ilo).
an area at risk
The scale of impact varies, but if the crisis persists, the consequences will be severe.
ESCAP warns of development in developing Asia-Pacific Economies may slow to about 4.0 percent in 2026Down to 4.6 percent in 2025. Poverty, food insecurity and inequality could worsen, along with job losses and possible displacement of migrant workers.
To mitigate the impact, ESCAP calls for coordinated policy action, including targeted fiscal support, cash transfers and support for small businesses.
Countries may also need to tighten monetary policy to manage inflation and financial stability risks, while long-term efforts should focus on diversifying energy sources, trade routes and supply chains.
An informal sector worker eating roadside food in Bangkok. (file photo)
human cost
But beyond the economic consequences, The deepest concern is the human toll – As global shocks are increasingly being felt in homes and villages.
“As the crisis continues, The main risk is that an external economic shock becomes a domestic crisis,” Said iloNuman Ozcan.
