Hormuz disruptions threaten SMEs, lift oil prices and freight costs
UNCTAD warns that ongoing Strait of Hormuz tensions could push small and medium enterprises out of global supply chains while pushing crude oil above $99 a barrel, raising freight and insurance costs.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Negative · Do not buy
Higher freight, insurance and financing costs hurt SMEs and transport‑related sectors, leading to a cautious stance on related PSX stocks.
Sectors & Direction
Desk read
Desk call: Do not buy · Negatively affected
- Oil & GasNegatively affected
- TransportNegatively affected
- CementNegatively affected
- SteelNegatively affected
- MarketsNegatively affected
Companies
Companies Mentioned
- OGDC· Negatively affected · Do not buy
Mentions in This Briefing
Sectors: Oil & Gas, Transport, Cement, Steel, Markets — Negative · Do not buy. PSX tickers: OGDC. Higher freight, insurance and financing costs hurt SMEs and transport‑related sectors, leading to a cautious stance on related PSX stocks.
Full Story
Open on Business Recorder## UNCTAD warns of SME exclusion amid Hormuz tensions
The United Nations Conference on Trade and Development (UNCTAD) said on Tuesday that disruptions in the Strait of Hormuz risk forcing small and medium‑sized enterprises (SMEs) out of international supply chains. The agency highlighted that SMEs, which make up about 90% of global firms, 70% of employment and 50% of world GDP, face higher operating costs and tighter financing when shipping routes are disrupted.
## Rising energy and freight costs
The latest flare‑up between the United States and Iran has driven up energy bills, freight rates, insurance premiums and borrowing costs. Brent crude rose more than 2% to above $99 a barrel after a month of calm in August gave way to renewed fighting in the Gulf, including Houthi attacks on Saudi energy facilities.
## Impact on global trade and Pakistan
Higher oil and shipping costs increase input expenses for Pakistani import‑dependent manufacturers and transport operators. At the same time, oil‑related companies stand to benefit from stronger crude prices. UNCTAD warned that the “SME exclusion effect” could see smaller firms scaling back production, delaying investments or exiting value chains, even if overall trade volumes recover.
## Outlook for Pakistani markets
Investors should monitor how sustained higher freight and insurance costs affect sectors such as Transport, Cement and Steel, while Oil & Gas firms may enjoy a price tailwind. Continued volatility in the Strait of Hormuz is likely to keep the Pakistani rupee under pressure and add uncertainty to market sentiment.