UN warns of humanitarian and economic catastrophe
The United Nations World Food Programme (WFP) warned in its latest report of serious repercussions for the global economy, indicating that the number of people facing acute levels of hunger could reach record highs by the end of 2026. This warning comes amid continued military escalation in the Middle East, which is destabilizing the global economy and energy markets, presenting the world with unprecedented challenges.
Historical context: The link between energy prices and food security
Historically, there has always been a close and direct link between energy prices and food costs. Food supply chains rely heavily on fuel, whether for powering agricultural machinery, producing natural gas-based fertilizers, or for international transport and shipping. In 2022, during the war in Ukraine, the world experienced a similar crisis, with global hunger reaching record levels and affecting some 349 million people. Any shock to oil markets immediately translates into inflation in commodity prices, bringing to mind the devastating global food crisis of 2008.
The strategic importance of the Strait of Hormuz and its impact
In the current context, tensions in the Middle East are of paramount importance, particularly given the threats surrounding the Strait of Hormuz. This strait is a vital artery through which approximately one-fifth of the world's daily oil consumption passes. The report indicated that if the conflict continues until the middle of this year, with oil prices remaining above $100 per barrel, an additional 45 million people could be pushed into food insecurity or worse. This would add to the 318 million people already suffering from a global food crisis.
Oil market movements and rising prices
Regarding prices and market movements, oil prices saw a significant increase of more than 3%, recovering from the losses of the previous session. This rise came amid renewed concerns about global supplies, coinciding with the near-complete closure of the Strait of Hormuz and the rejection by US allies of calls to deploy warships to escort oil tankers through this strategic waterway.
This was reflected in the figures, with Brent crude futures rising $3.32, or 3.32%, to $103.53 a barrel. Meanwhile, U.S. West Texas Intermediate crude rose $3.36, or 3.59%, to $96.86 a barrel. It's worth noting that in the previous session, Brent crude futures settled down 2.8%, while WTI fell 5.3% after some ships sailed through the strait.
Regional and international economic repercussions
The anticipated impact of this crisis extends beyond local and regional boundaries to a comprehensive international level. Developing countries that import food and energy will be the hardest hit, facing the double pressure of rising import costs and depreciating currencies against the dollar. This situation presents the international community with a genuine challenge, requiring urgent intervention to ensure the stability of supply chains and avert a humanitarian and economic catastrophe that could affect millions of people in the coming years.
