What Happened
- The World Trade Organization released a report projecting global merchandise trade growth will slow sharply to 1.9% in 2026 — down from 4.6% in 2025 — primarily because of the ongoing conflict in West Asia and its cascading supply chain disruptions.
- In a more severe scenario — where elevated oil and LNG prices persist through 2026 — global trade in goods could slow further to just 1.4%, the WTO warned.
- A key channel of disruption is the Strait of Hormuz blockade, which has choked fertiliser supply chains: roughly one-third of global urea and ammonia exports transit the strait, threatening agricultural producers including India, Thailand, and Brazil.
- Services trade is also affected, with shipping and flight disruptions expected to reduce services trade growth by 0.7 percentage points.
- The WTO notes that Asia will lead merchandise import and export growth in 2026, but the conflict is disproportionately damaging to commodity-dependent developing economies.
Static Topic Bridges
Strait of Hormuz: The World's Most Critical Maritime Chokepoint
The Strait of Hormuz is a narrow waterway separating the Arabian Peninsula from Iran, connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. At its narrowest point, it is only 34 kilometres wide. It is the world's single most important maritime chokepoint for energy trade: approximately 20 million barrels of oil per day — roughly 20% of global petroleum liquids consumption — transit the strait, along with about 20% of global LNG trade. Additionally, approximately 45% of global sulphur exports (essential for fertiliser production) pass through Hormuz.
- In 2024, an estimated 84% of crude oil and condensate flowing through the strait was destined for Asian markets — including India, China, Japan, South Korea.
- China receives approximately one-third of its oil imports via the Strait of Hormuz.
- Qatar's Ras Laffan — the world's largest LNG hub — exports exclusively through the strait; 96% of the UAE's LNG exports also transit through it.
- A full Hormuz blockade would immediately constrain ~20% of the world's daily oil supply.
- Brent crude oil surpassed $100/barrel on March 8, 2026 for the first time in four years, reaching $126/barrel at peak during the crisis.
Connection to this news: The WTO's downward trade revision is directly tied to the Hormuz disruption. Even partial restrictions raise insurance costs, shipping times, and commodity prices globally — with fertiliser supply disruption being the most acute second-order effect for agricultural economies.
Fertiliser Supply Chains and Food Security
Fertilisers — primarily urea (nitrogen-based), DAP (diammonium phosphate), and MOP (muriate of potash) — are indispensable inputs for modern agriculture. Global fertiliser production is concentrated in a small number of countries: Russia, China, Canada (potash), Saudi Arabia, Qatar, and UAE (urea and ammonia). The Gulf states together are among the world's largest exporters of urea and ammonia — all of which must transit the Strait of Hormuz to reach global markets.
- Approximately one-third of global urea imports pass through the Strait of Hormuz, according to WTO estimates.
- India is among the world's largest urea importers, heavily subsidising fertilisers for its ~100 million farming households under the Fertiliser Subsidy Scheme.
- A Hormuz blockade disrupting urea supply raises domestic prices, endangers the kharif and rabi sowing seasons, and triggers food security concerns.
- Brazil, Thailand, and Vietnam — major agricultural exporters — also depend heavily on Gulf fertiliser imports, creating second-order impacts on global food commodity prices.
- Russia supplies ~25% of global ammonia, 17% of potash, 15% of urea — the war in Ukraine already strained these flows before the current West Asia crisis.
Connection to this news: The WTO report highlights fertiliser supply disruption as one of the most damaging indirect effects of the West Asia conflict for agricultural producers like India — compounding already elevated food inflation risks.
WTO's Role in Monitoring Global Trade
The World Trade Organization, established on January 1, 1995 as the successor to the General Agreement on Tariffs and Trade (GATT, 1947), serves as the institutional framework for global trade rules. Among its functions is the monitoring and publication of trade statistics and forecasts, including the Global Trade Outlook and Statistics reports. These annual reports, updated in April and October each year, provide the most authoritative assessment of trade volume trends and are closely watched by governments, central banks, and financial markets.
- WTO Secretariat, headquartered in Geneva, Switzerland, monitors trade flows and disputes.
- The WTO's 2026 trade forecast (1.9% base / 1.4% downside for goods) comes alongside a services trade forecast reduction of 0.7 percentage points.
- WTO forecasts factor in tariff policy (including US tariff actions), geopolitical shocks, and commodity price movements.
- In a "positive scenario" where the conflict ends quickly, trade growth could rebound above baseline.
Connection to this news: The WTO's downgrade — from 4.6% in 2025 to as low as 1.4% in 2026 — underscores that the West Asia conflict has escalated from a regional crisis to a global economic shock, with trade as a key transmission channel.
Key Facts & Data
- WTO forecast for global merchandise trade growth 2026: 1.9% (base); 1.4% (downside if oil/LNG prices stay elevated).
- Actual global merchandise trade growth in 2025: 4.6%.
- Strait of Hormuz oil transit: ~20 million barrels/day (~20% of global petroleum consumption).
- Strait of Hormuz LNG transit: ~20% of global LNG trade.
- Strait of Hormuz fertiliser transit: ~one-third of global urea exports.
- Brent crude peak (2026 crisis): $126/barrel; crossed $100 on March 8, 2026.
- Services trade growth revision: cut by 0.7 percentage points.
- Asia: projected to lead merchandise import growth at +3.3% and export growth at +3.5% in 2026.
- WTO established: January 1, 1995 (successor to GATT 1947); headquartered in Geneva.