Hormuz disruptions risk pushing SMEs out of global trade, UN warns

The conflict in the Middle East, including renewed fighting between Iran and the U.S. and Houthi attacks in Saudi Arabia, has led to increased energy bills, freight rates, insurance premiums, and financing constraints. These rising costs place a heavier burden on SMEs compared to larger corporations, which have greater capacity to diversify suppliers, markets, and funding.

UNCTAD highlighted that SMEs constitute approximately 90% of global businesses, provide 70% of employment, and contribute 50% of world GDP. The agency warned of an "SME exclusion effect," where smaller companies might be forced to scale back production, delay investments, or exit value chains entirely, even as overall trade volumes eventually recover.

Recent shocks have already manifested in higher crude oil prices, reduced shipping transit volumes, and increased borrowing costs, all of which weigh heavily on SMEs that already face higher relative operating expenses. UNCTAD spokesperson Marcelo Risi emphasized the risk of smaller firms being excluded from value chains during trade recovery periods.