By Omar M. Elmi
Wednesday April 1, 2026
The ongoing war in the Middle East is causing significant human and material losses. Beyond the immediate destruction, however, the conflict is also generating far-reaching economic consequences. Countries far removed from the battlefield are already beginning to feel its indirect effects. Ethiopia, a landlocked nation of more than 120 million people, is among the most vulnerable.
This vulnerability stems from a structural reality: the country’s heavy dependence on external supply chains, both for energy and agricultural inputs. More than 95% of Ethiopia’s imports and exports transit through Djibouti, making the Djibouti–Addis Ababa corridor the lifeline of its economy. This dependence becomes particularly critical when it comes to energy supply.
The Strait of Hormuz lies at the center of this vulnerability. Around one-fifth of the world’s oil, as well as a significant share of liquefied natural gas, passes through this narrow maritime chokepoint. Any disruption—whether due to military escalation, security risks, or shipping restrictions—can immediately affect global supply and prices.
Recent developments already indicate growing pressure on Ethiopia’s energy supply. Prime Minister Abiy Ahmed has called on the population to conserve fuel and limit its use to essential needs. This appeal reflects mounting strain on available resources and shows how external shocks are beginning to translate into domestic constraints.
For Ethiopia, such a situation would quickly result in rising fuel costs. Higher international oil prices would increase the cost of imports, triggering a ripple effect across the entire economy. Transport costs along the Djibouti corridor would rise, leading to higher prices for goods and services. Inflationary pressures, already present in recent years, would likely intensify.
However, Ethiopia’s vulnerability is not limited to energy. It also affects a strategic sector: agriculture, particularly the country’s dependence on imported fertilizers.
Agriculture remains the backbone of Ethiopia’s economy and the main source of livelihood for the majority of its population. Yet this sector relies heavily on imported inputs. In recent years, Ethiopia has imported between 1.6 and 1.8 million tons of fertilizer annually, mainly urea and compound fertilizers (NP). It is the largest fertilizer importer in Africa, according to the International Fertilizer Development Center (IFDC). These inputs are essential to maintain agricultural yields in a country that cultivates more than 20 million hectares and whose food security largely depends on cereal production.
Fertilizer markets are closely linked to energy markets. The production of nitrogen-based fertilizers, such as urea, depends heavily on natural gas. As a result, any increase in energy prices directly translates into higher fertilizer costs. In a context of tensions around the Strait of Hormuz, this dependency becomes particularly critical.
A prolonged disruption in the region would therefore create a double shock for Ethiopia. On the one hand, an energy shock, with rising fuel costs. On the other, an agricultural shock, driven by higher fertilizer prices or delays in supply.
The consequences for agriculture could be significant. If farmers are unable to access fertilizers in sufficient quantities or at affordable prices, agricultural yields may decline. This would affect not only rural incomes but also food prices nationwide. In a country where food security remains a major concern, such developments could exacerbate existing vulnerabilities.
The combined effect of rising energy costs and agricultural stress goes beyond the economic dimension. It could have important social implications, particularly if higher prices for essential goods place additional strain on households. In such a context, external shocks can quickly translate into internal pressures.
The current situation highlights the strategic nature of supply chains often treated as purely commercial. For Ethiopia, energy and fertilizer imports are not just market transactions. They are matters of national security.
Reducing this vulnerability requires a strategic approach. Expanding fuel storage capacity, diversifying supply sources, and improving transport infrastructure are essential levers. At the same time, agricultural policies aimed at optimizing input use and reducing dependency on imports should be encouraged.
Finally, the crisis in the Middle East serves as a reminder of how interconnected today’s economies have become. A disruption in a distant maritime chokepoint can have immediate consequences for countries located thousands of kilometers away.
For Ethiopia, the Strait of Hormuz is a vital artery of supply. If that artery is disrupted, the consequences will be felt in transport systems, markets, farms, and the daily lives of millions of citizens.
Sources
- World Bank – Addis-Djibouti trade corridor reports
- U.S. Energy Information Administration – Global oil and LNG transit through the Strait of Hormuz
- Reuters – Energy market disruptions and global supply risks (2026)
- AfricaFertilizer – Ethiopia fertilizer import statistics (2023–2024)
- FAO – Linkages between energy and fertilizer prices
- Djibouti Ports and Free Zones Authority – Doraleh and Damerjog infrastructure data
