Rising energy costs triggered by the escalating conflict around the Strait of Hormuz are beginning to ripple across global food and commodity markets, with sugar supply chains among the first to feel the pressure. Higher oil prices and disrupted maritime routes are raising freight, refining and input costs across agricultural commodities, while policymakers scramble to stabilise energy markets amid widening supply disruptions.
Sugar, food chains face indirect shock
While energy markets have drawn immediate attention, the conflict is also tightening global food supply chains. Disruptions to shipping routes through the Suez Canal and the Persian Gulf are forcing cargo vessels to reroute around the Cape of Good Hope, increasing freight costs and delivery times for several commodities, including sugar.
According to Hedgepoint Global Markets, an agri-energy risk advisory firm, the impact on the sugar trade is indirect but increasingly significant as key maritime corridors remain disrupted.“With the main gateway to the Atlantic basin blocked, shipments from Brazil and Central America, which supply the bulk of regional raw sugar imports, now have to make a longer and more expensive detour around the Cape of Good Hope. The same is true, to a lesser extent, for white sugar exports from Europe, which also use Suez as a more efficient route,” said Lívea Coda, market intelligence coordinator at Hedgepoint.
Rising oil prices are also reshaping sugar market dynamics through biofuel economics. In Brazil, higher fuel prices improve ethanol’s competitiveness relative to gasoline, encouraging mills to divert more sugarcane toward ethanol production, a shift that could tighten global sugar supply and support prices, the firm noted.
Strait of Hormuz disruption spreads across trade
The broader economic risk stems from the paralysis of maritime traffic through the Strait of Hormuz, a narrow passage connecting the Persian Gulf to global markets. According to a March 2026 report by the United Nations Conference on Trade and Development (UNCTAD), the waterway normally carries about a quarter of global seaborne oil trade along with significant volumes of liquefied natural gas, fertilisers and petrochemicals.
The report warned that disruptions in the strait are cascading through global supply chains, raising freight rates, insurance premiums and bunker fuel costs. These increases could translate into higher prices for food and other essential goods, intensifying cost-of-living pressures in vulnerable economies.
Many developing countries are particularly exposed. According to UNCTAD, nations already facing high debt burdens and limited fiscal space could see additional strain on public finances as energy, food and transport costs rise simultaneously.
Energy markets remain volatile
The geopolitical shock has also roiled global oil markets. Prices surged earlier this week amid fears that supplies moving through the Strait of Hormuz, the world’s most critical oil chokepoint, could remain blocked for an extended period.
