World Bank Tracks Supply-Chain Damage Across the Middle East

Supply-chain disruption across the Middle East has landed on several fronts at once: lower shipment volumes, interrupted energy exports, costlier insurance and longer voyages. How hard each country has been hit depends heavily on whether it controls a route that avoids the Strait of Hormuz, according to the World Bank's MENAAP regional economic update.

Energy trade took the sharpest blow. Tanker traffic out of the Gulf ran between roughly 1.5 million and 2 million metric tonnes per day before the conflict, then dropped to about 500,000 mtpd in late March. Volumes recovered but stayed below the pre-conflict range, and slid again to around 300,000 mtpd in August.

Gas suffered as well. Qatar's average monthly natural gas output fell about 67% between March and July 2026 compared with the same months of 2025, the result of operational problems, storage limits and reduced access to normal export routes.

The WTO's Strait of Hormuz tracker points the same way. Crude oil, LNG and fertilizer shipments visible on AIS stayed severely constrained through July and August, and LNG activity all but disappeared from early August. The WTO cautions that vessels running without active AIS tracking are not counted, so the visible figures may understate what is actually moving.

Merchandise trade numbers follow the same pattern. Middle East export volumes fell 9.7% year on year in the first quarter of 2026 while imports dropped 11.9%. In March, global crude oil imports from the region were down roughly 45% year on year, LNG imports fell 52% and fertilizer imports declined 26%.

Food supply chains absorbed the next shock. In Qatar, food inflation passed 12% year on year in June, against headline inflation a little above 2%. Bahrain and Oman each saw food inflation above 7%, more than double headline rates of about 3%.

Fertilizer shipments through Hormuz effectively stalled once the conflict began. Urea prices went from about $400 a metric tonne to more than $850 in April before easing to $453 in June, while diammonium phosphate climbed from roughly $580 to around $770 a tonne. The WTO warned that shortages and higher prices could feed through to farm output and food costs, with Africa and Asia most exposed.

Some states worked around the chokepoints. Saudi Arabia redirected exports through the East-West Pipeline and Red Sea terminals, lifting tanker traffic from about 200,000 mtpd in April to close to 900,000 mtpd by July. That route carries its own risks: Bab el-Mandeb traffic collapsed from around 800,000 mtpd to near zero, and the East-West Pipeline was shut from September 11 to September 22.

The UAE kept exporting through Fujairah, which sits outside Hormuz and connects by pipeline to Abu Dhabi's oil fields, preventing a complete halt in shipments. Oman faced less exposure because the Duqm and Qalhat terminals do not require passage through Hormuz. Iraq expanded its use of alternative and overland corridors.

Egypt lost an estimated $16.5 billion in foreign-currency earnings from Suez Canal disruption between November 2023 and July 2026, as vessels diverted around the Cape of Good Hope. The detour added sailing distance, fuel and delivery time to every voyage, and the persistence of rerouting shows maritime disruption can outlast the conflict that caused it.

More recent official figures point to a partial recovery. The Suez Canal Authority recorded 1,358 crossings in August 2026 and $567.1 million in revenue, against 1,070 vessels and $326 million a year earlier, a revenue increase of 56.7%. Container-ship net tonnage through the canal reached 72.1 million tonnes in the first eight months of 2026, up 54.2% from 46.7 million tonnes in the same period last year.

Insurance has been slower to normalize. War-risk premiums on Red Sea routes went from almost nothing in 2023 to roughly 1% of cargo value in early 2024, and stayed elevated even as attacks eased in 2025. Premiums for Strait of Hormuz traffic rose several-fold during the latest disruption. Those costs raise import bills, squeeze exporter margins and add delay and uncertainty to supply chains, the World Bank noted.

The IMF's PortWatch, which monitors maritime trade using satellite data, identifies the Strait of Hormuz as a chokepoint through which about 25% of globally traded maritime oil passes.