After five weeks of war in the Middle East, the Strait of Hormuz has become a chokepoint for the global economy. Following the military escalation of February 28, 2026, the waterway has entered what the United Nations now describes as a state of virtual closure.

According to the report by UN Trade and Development (UNCTAD), the strait—normally "one of the world's most vital arteries of energy-related trade"—is now under systemic disruption. Although energy dominates the headlines, the ripple effect echoes through the entire economy, and its full effects may materialize months later.

Daily ship transits have collapsed by 95%, falling from a February average of 129 vessels to just six in March. UNCTAD warns that global merchandise trade growth could fall as low as 1.5% in 2026, noting the increasingly devastating global economic impact.

The Delayed Shock

Brent Johnson, CEO of Santiago Capital, describes the ongoing situation as the "Last Ships" phenomenon, the final delivery before the supply vacuum.

"The last ships are going to start arriving… and there's just no ships or very few ships behind them," he argued in a recent outlook.

The regional exposure is asymmetric but acute. As much as 76% of Hormuz oil flows go to Asia. Meanwhile, Australia faces a different vulnerability—geographic isolation and limited reserves, with roughly 28 days of net oil supply. The lag effect compounds the shock.

While Asian markets feel immediate disruption, Europe and the United States are only now entering the critical window, given 10- to 45-day transit times.

"Shortages are going to start to happen… this is kind of a given at this point," Johnson notes.

Beyond the Energy

However, what began as an energy crisis has rapidly turned into a food security threat. The Gulf region supplies roughly 15% of global fertilizer inputs, including urea and ammonia. Without these, agricultural output faces a structural decline.

The timing is everything in agriculture. A missed 2-to-4-week planting window cannot be recovered.

"You don't get to put Mother Nature on hold," Johnson clarifies.

The downstream effects are both delayed and severe. UNCTAD data show that 3.4 billion people already live in countries spending more on debt servicing than on health or education, amplifying the risk of systemic instability.

Within six to nine months, global food prices could rise by 20% to 40%, driven by yield reductions averaging 20%. The burden will fall disproportionately on vulnerable economies, and Johnson sees it as worse than 2010/11.

"When rice prices spiked 180%, wheat prices went up 130%, a couple hundred million people were affected," he says, recalling food riots and political instability as a result.

"Today's situation is just much worse than that was," he concluded.

Price Watch: VanEck Agribusiness ETF (NYSE:MOO) is up 16.06% year-to-date.

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