WASHINGTON, DC — DESPITE a fragile ceasefire that appears to be holding, United Nations Secretary-General António Guterres is warning that the war’s economic consequences are continuing to spread, particularly through rising oil prices and global market instability.
Since the conflict began in February, disruptions in the Strait of Hormuz and damage to key oil infrastructure have driven sharp spikes in energy costs and constrained production across the region.
Speaking to reporters at a stakeout at UN headquarters in New York, Guterres said that even with a ceasefire in place, the situation remains precarious.
“I am deeply concerned about the curtailment of navigational rights and freedoms in the area of the Strait of Hormuz,” he said.
Iran and the United States remain at odds over control and access to the vital shipping lane, which carries roughly 20 percent of global oil shipments, along with significant volumes of fertilizers and other essential commodities. Guterres noted that these disruptions are rippling across energy, transport, manufacturing and food systems worldwide.
The impact, he said, is already being felt globally.
“As with every conflict, the whole of humanity is paying the price — even if a few are reaping huge profits. The pain will be felt for a long time to come,” he added.
Countries around the world have begun adjusting to higher fuel costs, including Caribbean nations such as Saint Kitts and Nevis and The Bahamas, where increases in gasoline prices are putting added pressure on households and businesses.
Economists warn the prolonged disruption could slow global growth and raise the risk of recession. Guterres outlined three possible scenarios based on current forecasts.
In the first, even if the war were to end immediately, supply chains would take months to recover, prolonging lower economic output and higher prices. Global growth could fall from 3.4 percent to 3.1 percent, while inflation rises from 3.4 percent to 4.4 percent.
“Global merchandise trade growth will shrink — from 4.7 percent last year to roughly 2 percent — with some meaningful supply chain interruptions,” he said. “And a world still reeling from the shocks of a pandemic and the war in Ukraine will endure further economic distress.”
In a second scenario, where disruptions continue through midyear, global growth drops to 2.5 percent and inflation climbs to 5.4 percent. An estimated 32 million people could be pushed into poverty, while fertilizer shortages reduce crop yields and leave 45 million more people facing extreme hunger. Development gains, Guterres warned, could be reversed almost overnight.
A third and more severe scenario envisions disruptions lasting through the end of the year. Inflation would rise above 6 percent, while global growth slows to just 2 percent.
“Immense suffering takes hold, especially among the world’s most vulnerable populations,” he said. “And we confront the spectre of a global recession — with dramatic impacts on people, on the economy, and on political and social stability.”
"These consequences are not cumulative. They are exponential,” Guterres added. “The longer this vital artery is choked, the harder it will be to reverse the damage — and the higher the cost to humanity.”
He warned that developing countries will bear the brunt of the crisis, as heavy debt burdens limit their ability to respond, leading to job losses, rising poverty and worsening hunger.
Guterres called on all parties to restore safe passage through the strait without delay, in line with Security Council Resolution 2817.”
He also urged the reopening of the waterway to stabilize global markets and limit further economic fallout from the conflict.
