Despite the latest messages of de-escalation between the U.S. and Iran, tensions in the Middle East and the closure of the Strait of Hormuz have begun to raise concern in Colombia over the economic consequences the country could face in the coming weeks.
The disruption of the main maritime route for the global transport of oil and fertilizers threatens to alter supply chains, increase business costs, and intensify inflationary pressures.
Although the conflict is taking place thousands of miles away — and even though a short-term closure benefited Colombian oil — the persistence of the shutdown is already causing its effects to be felt in international markets, including Colombia’s.
Rising oil prices, more expensive maritime insurance, and logistical difficulties stemming from restrictions in Hormuz have created a scenario of uncertainty for economies dependent on global trade, including Colombia’s.
Companies, agricultural producers, and analysts warn that the impact could be concentrated on three fronts: hydrocarbon and fertilizer supplies, higher operating costs, and tighter financial conditions.
The closure of the Strait of Hormuz and its impact on Colombia
Although Colombia produces oil and coal, the national economy still depends on international markets for multiple energy and agricultural inputs. The closure of Hormuz disrupted the global circulation of hydrocarbons and petrochemical products, causing delivery delays, higher freight costs, and more expensive raw materials.
The problem is especially sensitive in the case of fertilizers. A large portion of the urea, ammonia, and other products essential to global agriculture pass through that strategic area. The partial disruption of trade threatens to increase costs for Colombian agricultural producers, especially in sectors such as coffee, rice, flowers, and corn, which are highly dependent on imported inputs.
The increase in costs is also affecting manufacturing industries and transportation companies, which are already facing higher fuel and international logistics expenses. Importing companies have begun reporting increases in shipping rates and delays caused by new routes used by shipping companies to avoid the conflict zone.
The economic consequences of the blockade are not limited to foreign trade. Rising oil prices in international markets gradually spill over into the Colombian economy through higher operating costs for businesses.
Transport-intensive sectors such as food, construction, commerce, and aviation face a particularly complex scenario. Higher fuel prices directly affect the cost of moving goods inside and outside the country, hurting profit margins and increasing pressure on final consumer prices.
Companies that depend on imported raw materials are also facing higher production costs. Added to this is the impact of the dollar, which tends to strengthen during international crises and periods of global uncertainty. A stronger U.S. currency makes Colombian imports more expensive and increases financial pressure on companies with dollar-denominated obligations.
The situation is generating concern among business leaders, especially because the Colombian economy is still showing signs of slowdown and moderate consumption. For many businesses, an external shock of this magnitude is arriving at a moment of fragility, with interest rates still high and the economic recovery incomplete.
Inflationary risk and high interest rates
One of Colombia’s biggest fears is that the crisis could fuel a new wave of inflation, as is already beginning to happen in the Americas and Europe. When international oil prices and transportation costs rise, the impact is usually passed on to basic goods, food, and services.
More expensive fertilizers could translate into higher agricultural costs and, later, increases in food prices. At the same time, rising fuel prices affect entire distribution and transportation chains, increasing the cost of living for millions of people.
The scenario also complicates the strategy of the Central Bank (Banco de la Republica, in Spanish). In recent months, the monetary authority had begun a gradual process of cutting interest rates following the decline in inflation. However, renewed pressure on prices could force the central bank to maintain more restrictive financial conditions for longer.
In fact, over the last three months, disagreements over economic policy have triggered an open confrontation between President Petro’s government and the bank’s board of directors, which is much more in favor of tightening control and raising rates.
That means more expensive loans for businesses and households, weaker economic momentum, and an additional setback for sectors that depend on financing, such as housing, commerce, and construction.
The Strait of Hormuz crisis demonstrates the extent to which the Colombian economy remains connected to global geopolitical tensions. A conflict in the Middle East has the capacity to alter prices, supply chains, and economic expectations thousands of miles away.
Although there is still uncertainty over how long the closure will last, the impact has already begun to be felt in international markets and in the economic outlook of importing countries such as Colombia. If the situation continues, the country could face months of higher costs, inflationary pressures, and less room to accelerate economic recovery.