IISD Trade and Sustainability Review, July 2026

Introduction 

For decades, the closure of the Strait of Hormuz was a risk that analysts wrote about in the conditional tense. In late February 2026, the conditional became real: following U.S. and Israeli strikes on Iran, the waterway that carries roughly a quarter of the world's seaborne oil—and close to 30% of globally traded fertilizer—effectively closed to commercial shipping. Months later, despite a June memorandum of understanding between the United States and Iran and a partial resumption of traffic, transit volumes, insurance premiums, and shipping routes remain far from normal at the time of writing. Whatever the final shape of a settlement, the crisis has already delivered its central lesson: in a fragmenting global economy, dependence on a single chokepoint—for energy, for inputs, for market access—is a strategic vulnerability. This issue of the Trade and Sustainability Review looks beyond the headlines about oil prices to examine how the closure rippled through regions and sectors, and what governments can do to build resilience before the next shock. 

Yana Popkostova opens 2,000 kilometers north of the strait, in landlocked Central Asia, where the crisis foreclosed the region's long-sought southern corridor to the Indian Ocean and risked pushing it back into dependence on Russian and Chinese routes—a cautionary mirror, she argues, for Europe's own quest for strategic autonomy through connectivity, infrastructure, and trusted partnerships. 

Darcie Doan turns to agriculture, tracing a striking historical echo: 128 years after chemists were challenged to break the world's dependence on imported Chilean nitrates, a military blockade has once again cut off the inputs that feed the planet, and the crisis could become a turning point for smarter nitrogen use and more resilient food systems. 

William George and Lynn Hughes assess the chokepoint effect across Asia, comparing how China's vast reserves and coal-based chemical industry, Japan's stockpiles, and Vietnam's naphtha-dependent plastics sector shaped three very different experiences of the same shock. 

Enrique Millán-Mejía and Ignacio Albe examine Latin America and the Caribbean, where disrupted oil and gas supplies have fed inflation and higher interest rates, and identify where investment in domestic energy production and renewables could strengthen long-term resilience. 

Finally, David Beer looks at Africa's compound shock of higher shipping, energy, and fertilizer costs—but also at the openings it reveals, from expanding refining capacity and booming eastern and southern ports to the untapped potential of intra-African trade under the African Continental Free Trade Area. 

Together, these articles make a shared case: resilience is not built in the middle of crises, but in the choices made between them—to diversify routes and suppliers, invest in regional capacity, and keep options open in an age of fragmentation. 

Enjoy your reading, 

Maria Barral

Articles 

The Tyranny of the Landlocked: The value of options in an age of fragmentation 

As disruptions in the Strait of Hormuz send shockwaves far beyond the Middle East, Central Asia and Europe are reminded that resilience depends on more than resources alone. Yana Popkostova outlines how, in an increasingly fragmented world, strategic autonomy is built through connectivity, infrastructure, and trusted partnerships.

Read article here. 

What the Hormuz Crisis Teaches Us About Agriculture’s Strategic Vulnerability 

The Strait of Hormuz closure has cut off 30% of global fertilizer trade, triggering a price shock and urgent questions about food system fragility. Darcie Doan explains what this crisis reveals about our dependence on volatile supply chains and why it may be a turning point for smarter nitrogen use and long-term resilience.

Read article here. 

How the Hormuz Blockade Hit Asia: The chokepoint effect on China, Japan, and Vietnam 

The Strait of Hormuz closure has sent shockwaves through energy markets across Asia, with countries facing different levels of exposure depending on their reserves, supply chains, and renewable capacity. William George and Lynn Hughes assess how China, Japan, and Vietnam are navigating the fallout and what it reveals about the state of energy security across the region.

Read article here. 

How the Iran War Has Affected the Economic Outlook of Latin America and the Caribbean 

The war in Iran has disrupted oil and gas supplies through the closure of the Strait of Hormuz, driving up inflation and interest rates across Latin America and the Caribbean. Enrique Millán-Mejía and Ignacio Albe explore the countries most exposed and where investment in domestic energy production and renewables could strengthen long-term resilience.

Read article here. 

Strait of Hormuz Closure: Implications for African trade resilience 

The crisis in the Middle East is straining African supply chains as global shipping reroutes around the Cape of Good Hope, significantly boosting port traffic. David Beer explores what this shift means for the continent and how to turn this disruption into lasting gains for regional trade.

Read article here.