Hormuz disruptions hitting small businesses hardest, UN trade agency warns
UNCTAD said SMEs account for 90% of global businesses and face higher energy, freight and financing costs than larger firms.
- On Tuesday, the United Nations Conference on Trade and Development reported that Strait of Hormuz disruptions could push small and medium-sized enterprises out of global supply chains, weakening international trade resilience.
- Fighting in the Gulf resumed this month as Iran and the U.S. exchanged fire after a month of August calm, while Houthi attacks on southwestern Saudi Arabia threaten to deepen Middle East energy disruptions.
- SMEs account for around 90% of global businesses, 70% of employment, and 50% of world GDP, yet rising energy bills and financing constraints place heavier burdens on them than large corporations.
- UNCTAD spokesperson Marcelo Risi warned of an "SME exclusion effect," where smaller firms face forced production cuts or exit value chains entirely, even if global trade volumes eventually recover.
- Brent crude prices rose more than 2% on Tuesday to trade above $99 a barrel, reflecting market shocks already visible in lower shipping transit volumes and higher borrowing costs.
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19 Articles
West Asia Disruption Can Affect SMEs Disproportionately: UN
Trade disruptions affect businesses of all sizes, but their capacity to absorb shocks varies. Larger companies can often spread risks across suppliers, markets and sources of finance. Smaller firms, by contrast, typically have fewer alternatives when energy, transport and financing costs rise
UNCTAD warns that the crisis in Hormuz threatens to push small businesses out of global supply chains, weakening the resilience of world trade.
The United Nations Conference on Trade and Development (UNCTAD) warned today that disturbances in the Strait of Hormuz could lead to the exclusion of small and medium-sized enterprises from global supply chains, increasing the control of a small number of large firms in a larger market share and weakening the flexibility of international trade.
Interruptions in the Strait of Ormuz can drive small and medium-sized enterprises away from global supply chains, increasing economic concentration and weakening the resilience of international trade, said the United Nations Conference on Trade and Development on Tuesday. Increasing energy accounts, freight rates, insurance premiums and financing restrictions caused by the conflict between the United States and Iran impose heavier burdens on sma…
Hormuz disruptions hitting small businesses hardest, UN trade agency warns
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