WASHINGTON, DC – WITH no clear end in sight to the war involving Iran, international agencies are raising concerns about the potential global economic fallout, particularly rising food and energy prices.
In a report released yesterday (Mar. 10), the United Nations Trade and Development (UNCTAD) warned that disruptions to the Strait of Hormuz could pose serious risks to global trade and economic stability.
According to the report, the strategic waterway is one of the world’s most critical maritime routes, handling roughly a quarter of global seaborne oil shipments.
“The report underscores that the Strait of Hormuz is a critical maritime checkpoint, carrying about a quarter of the global seaborne oil and roughly one-third of the global [seaborne] fertilizer trade — about 16 million tonnes of fertilizer annually,” said Stéphane Dujarric, Spokesman for the UN Secretary-General, during a press briefing in New York.
He noted that disruptions in the region have already had an impact on global markets. “As you have seen, following recent disruptions, Brent crude oil prices rose above $90 per barrel,” Dujarric added.
Tensions escalated after the United States and Israel launched military strikes against Iran, triggering retaliatory attacks across the region. Iranian strikes have reportedly targeted key infrastructure in several Gulf states, including oil facilities.
Washington has responded with continued air strikes as it pressures Tehran to return to negotiations. Meanwhile, Iran has moved to restrict access to the Strait of Hormuz — a key shipping corridor used by a significant portion of global maritime traffic.
Reports indicate that shipping through the strait has dropped sharply since the conflict began, raising concerns that disruptions to energy supplies could ripple through global markets and ultimately impact consumers.
UNCTAD warned that sustained disruptions could have far-reaching consequences, inluding higher energy, fertilizer and transport costs, which could "drive up food prices and intensify cost-of-living pressures, particularly for the most vulnerable people around the world".
The agency added that the scale of the economic impact will depend largely on the duration and intensity of the conflict, stressing the importance of safeguarding international maritime trade routes.
The issue has also been highlighted in St. Kitts and Nevis, where Prime Minister Dr. Terrance Drew has pointed to the conflict as a reminder of the importance of energy independence.
Speaking during a yesterday's roundtable with reporters, Dr Drew warned that rising global fuel prices will inevitably affect the Federation.
“Let me say we see the war that is taking place in the Middle East. That is going to have an impact on us,” he said. “We already see the price of gasoline or fuel rising. We have seen that the price is rising. As it continues to rise, it will affect us here in St. Kitts and Nevis as well.”
He said this underscores the need for the country to accelerate its transition toward renewable energy.
“That is why it’s important that we transition from fossil-fuel-based energy generation to renewable energy,” Drew added.
At several points since the conflict began, global oil prices have surged to around US$100 per barrel, a level economists warn could translate into siginificantl higher transportation, electricity and food costs.
The Prime Minister said the government plans to move forward with major renewable energy initiatives, including a solar project expected to generate 50 megawatts of electricity.
"That is why this month we are going to release the RFP for our 50-megawatt solar project,” oted Dr Drew.
The government is also closely watching developments on Nevis’ geothermal project, which is expected to significantly boost electricity generation for both islands once completed.
“And I want to say, with respect to geothermal, a contract has been sent to the company that won the bid,” Drew said. “This is the most advanced that we have ever reached with respect to geothermal.”
He added that officials hope the contract will be finalized soon so drilling can begin later this year.
“Renewable energy will be one of the foundations of our country, of our economic landscape,” he said. “It is resilient because the sun will shine and the volcano will continue to produce heat. Those resources belong to the Federation of St. Kitts and Nevis.”
Meanwhile, the conflict continues to expand across parts of the Middle East, with Iran-backed allies in Lebanon becoming increasingly involved.
UN agencies report that large sections of southern Lebanon — including areas south of the Litani River, parts of the Baalbek governorate and the Bekaa Valley, as well as Beirut’s southern suburbs — have been caught up in escalating hostilities.
Air strikes and displacement orders have forced hundreds of thousands of people from their homes. According to Lebanese authorities, more than 660,000 people registered as displaced within the past week alone.
Healthcare systems are also coming under growing strain as hospitals struggle to cope with trauma cases while displaced patients with chronic illnesses face difficulty accessing treatment.
Attacks have also targeted medical services. On Monday, an Israeli strike reportedly hit a Red Cross ambulance in the town of Majdal Zoun in Lebanon’s Tyre district, injuring paramedics and damaging the vehicle.
Since March 2, the World Health Organization has recorded 23 attacks on healthcare facilities, resulting in 14 deaths and 26 injuries.
Humanitarian agencies say they are working with national authorities and non-governmental organizations to scale up assistance to those affected.
So far, relief teams have distributed hundreds of thousands of hot meals as well as mattresses and blankets to displaced families.
UN officials continue to call for urgent de-escalation.
“All parties must respect international humanitarian law,” a UN spokesperson said, emphasizing the need to protect civilians, healthcare facilities and other critical infrastructure.
The United Nations has also warned that additional international support will be needed as humanitarian needs continue to grow.
Meanwhile, the United Nations Interim Force in Lebanon (UNIFIL) reports ongoing rocket fire toward Israel, as well as airstrikes and artillery shelling near the Blue Line.
At the request of the municipality of Alma al-Shaab, UNIFIL peacekeepers recently facilitated the safe evacuation of about 80 civilians from the area.
The mission has also assisted several humanitarian operations led by the Lebanese Red Cross.
UN officials say all parties involved in the conflict must ensure the safety and security of UN personnel and facilities as fighting continues.
