The Bank for International Settlements published a working paper finding that disruptions to maritime traffic through the Strait of Hormuz act as a global supply shock, raising energy and fertiliser prices while reducing industrial production, increasing consumer prices and tightening credit conditions. The effects typically emerge after four to six months and can persist for up to a year, with supply-driven traffic reductions producing larger commodity price increases than demand-driven changes. Using ship movements from 2019 onward to measure unusual traffic changes, the study estimates that a standardised disruption is followed after 12 months by about a 1.5% decline in global industrial production and a 1% rise in global consumer prices. Supply-driven reductions are associated with increases of about 15% to 17% in real energy and fertiliser prices, while spreads widen by roughly 15 basis points for investment-grade corporate bonds, 50 basis points for high-yield corporate bonds and 30 basis points for emerging market sovereign bonds. The effects on inflation and credit spreads are larger when those measures are already elevated, and Hormuz provides a more consistent signal of global supply stress than other major chokepoints.
2026-09-17Bank for International Settlements
Bank for International Settlements paper finds Hormuz disruptions drive global stagflation and wider credit spreads
A Bank for International Settlements working paper finds that disruptions to Strait of Hormuz traffic generate lower global output, higher commodity and consumer prices, and wider credit spreads. Effects emerge after four to six months and can last up to a year, with the largest increases occurring when inflation or spreads are already high.