East African economies are facing a looming fertiliser and food shortage as the war in the Middle East disrupts global supply chains, forcing governments to reassess growth forecasts.

 

The region’s fragile food security situation has been worsened by disruptions in the Strait of Hormuz, a key maritime chokepoint through which about one-third of global seaborne fertiliser trade passes, as the United States and Israel intensify military attacks on Iran.

Oil and gas – key inputs in fertiliser production – have seen prices rise sharply since the conflict began on February 28.

Oil prices have already climbed above $100 per barrel.

An analysis by the United Nations Conference on Trade and Development (Unctad) on the implications of disruptions in the Strait of Hormuz warns that “access to fertilisers may worsen for some of the poorest countries,” including Sudan, Kenya, Tanzania, Somalia and Mozambique.

About 16 million tonnes of fertilisers, including urea, diammonium phosphate and monoammonium phosphate, were transported by sea from the Persian Gulf region in 2024.

When gas prices rise, fertiliser prices often follow.

Trade chokepointUnctad notes that disruptions in the Strait of Hormuz underscore the vulnerability of critical maritime chokepoints to geopolitical tensions and their ability to transmit shocks across supply chains and commodity markets.

The Strait of Hormuz is a vital passage for global trade. One week before the conflict began, the share of global seaborne trade passing through the strait included crude oil (38 percent), LPG (29 percent), LNG (19 percent), refined oil products (19 percent), chemicals including fertilisers (13 percent), containers (three percent) and dry bulk (two percent).

In 2024, around 20 million barrels of oil per day passed through the strait – about 25 percent of global seaborne oil trade. Crude oil and condensate accounted for 14 million barrels per day, while petroleum products made up about 6 million barrels per day.“But ship transits through the Strait of Hormuz have come to a near halt,” Unctad said.

Daily ship transits through the strait dropped to four on March 7 from 141 on February 27.

Price surgeFreight costs for shipping oil are soaring to historic highs. The price of marine fuel used by ships is rising, while war-risk insurance premiums are surging, further increasing shipping costs.

The scale of the disruption is significant. Gulf countries produce about 20 million barrels per day of liquids, and around 15 million barrels per day of exports have already been removed from the global market.

Global research firm Wood Mackenzie warns that oil prices could reach $150 per barrel if the Gulf shutdown continues, forcing demand destruction as Europe and Asia compete for limited non-Gulf supplies.“Prices will continue to escalate as the conflict prolongs,” the firm said in a statement dated March 10.“Much will depend on how long the war lasts, how long the Strait of Hormuz remains closed and whether the US Navy can ensure safe passage of vessels by escorting shipping. Global oil demand of 105 million barrels per day will still have to fall to balance the market and, in our view, that will require Brent to rise to at least $150 per barrel in the coming weeks.”

Rising energy, transport and food costs could therefore strain public finances and increase pressure on household budgets.

This could heighten economic and social pressures and complicate progress towards sustainable development, particularly in economies heavily dependent on imported energy, fertiliser and food.“Reducing risks to global trade and development, including environmental risks, requires de-escalation and safeguarding maritime transport, ports and seafarers, and other civilian infrastructure, while maintaining secure trade corridors in line with international law and freedom of navigation,” Unctad said.

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