The Strait of Hormuz, one of the world’s most critical energy chokepoints, has been effectively closed to international shipping since 28 February 2026, following joint military strikes by the United States and Israel on Iran, which included the killing of Iran’s supreme leader Ali Khamenei.
The disruption has created the largest supply shock in the history of the global oil market, with crude and oil product flows through the strait plunging from around 20 million barrels per day before the war to a trickle, forcing Gulf countries to cut total oil production by more than 11 million barrels per day.
Brent crude oil prices surpassed 100 US dollars per barrel on 8 March 2026 for the first time in four years, rising to 126 dollars per barrel at its peak. Brent crude futures are now up by almost 45 percent since hostilities began on 28 February, while Dutch TTF, the European benchmark for natural gas, is nearly 70 percent higher.
The International Energy Agency has described the situation as the greatest global energy and food security challenge in history.
A Chokepoint With No Backup
Around 25 percent of the world’s seaborne oil trade transited the strait in 2025, and options to bypass it are limited. Only Saudi Arabia and the United Arab Emirates have operational crude pipelines that could reroute flows, with an estimated 3.5 to 5.5 million barrels per day of available capacity. Saudi Arabia and the UAE have begun diverting some exports through these alternative routes, but the volumes fall far short of replacing strait traffic.
As companies reroute vessels around the Cape of Good Hope near the south of Africa, they face longer delivery times and significantly higher costs.
About 20 to 30 percent of global fertiliser exports also pass through the Strait of Hormuz. As liquefied natural gas plants shut down, urea production has been adversely affected, with Qatar halting production at its largest urea manufacturing plant.
Stagflation Risk Grows
Analysts at the Federal Reserve Bank of Dallas warn that a closure removing close to 20 percent of global oil supplies from the market is expected to raise the average WTI price of oil to 98 dollars per barrel and lower global real GDP growth by an annualised 2.9 percentage points in the second quarter of 2026.
While wealthier countries are expected to weather higher prices, countries in the developing world face the prospect of true shortages as material scarcities become inescapable.
The UN Conference on Trade and Development warns that many developing countries already face high debt service burdens, limited fiscal space, and constrained access to finance, meaning rising energy, transport and food costs could strain public finances and increase pressure on household budgets.
Ghana’s Fragile Recovery at Risk
Despite an impressive macroeconomic recovery in 2025, the structure of Ghana’s economy has not changed enough to cushion it from the shock. Inflation had fallen to 3.3 percent in February 2026, and the Monetary Policy Committee cut the policy rate by 150 basis points to 14 percent in March. That recovery now faces a direct threat.
As a net importer of petroleum products, Ghana is directly exposed to higher world prices. More expensive petroleum imports push up ex-pump prices, which feed into transport fares, freight charges and logistics costs. Without targeted policy measures, the next inflation prints could show disinflation stalling or reversing.
A prolonged disruption is likely to produce a stagflationary mix of higher inflation and slower real GDP growth, against the government’s budget assumptions of 6 to 10 percent period-end inflation and 4.8 percent growth.
PwC Ghana, in an analysis published this week, noted that while Ghana cannot influence events in the Gulf, it can control its policy response. Whether the country’s macro reset creates enough breathing room to absorb the shock will depend on the decisiveness of policymakers and the agility of businesses to adapt in real time.
