Global Economy Videos

Beyond the Gulf: How the Iran War Is Fueling Crisis in the Horn of Africa

The CSIS panel examined how the two‑month‑old Iran‑Israel conflict is reverberating far beyond the Gulf, turning the Red Sea into a new front of a globalized crisis. Closure of the Strait of Hormuz and attacks on Gulf fertilizer and LNG facilities have driven up energy and input costs, sending shockwaves through fuel, fertilizer and food markets across Sudan, Somalia and the broader Horn of Africa. Panelists highlighted stark data: fuel prices have risen 67% in Sudan and a staggering 150% in Somalia; fertilizer costs have spiked, forcing farmers to cut seed and input use during the critical planting season. Mercy Corps’ field research shows cash‑transfer programs have lost roughly half their purchasing power, while transport fees now exceed the value of some cargoes, making food movement commercially unviable. "The window to limit the next wave of hunger is measured in weeks, not months," warned Mercy Corps regional VP Malaku Jurga, echoing Kate Phillips Baraso’s observation that price spikes will echo for years through reduced yields and nutrition deficits. Caitlyn Welsh added that Gulf nations supply 50% of global sulfur and 20% of LNG, so any disruption instantly inflates global food prices. The combined effect threatens to push millions deeper into acute food insecurity, potentially sparking new famines by 2026‑27. Immediate coordination of humanitarian aid, diversified supply routes and accelerated financing are essential to prevent a full‑scale humanitarian disaster in a region already stretched by conflict, climate shocks and economic fragility.