By: Dionísio Babo Soares*
The United Nations Security Council’s triple veto — by Russia, China, and France — of a resolution to reopen the Strait of Hormuz in early April 2026 will not be remembered as a procedural footnote. It will be felt at petrol pumps, in food markets, and across the fragile balance sheets of countries that neither produce oil nor shape great-power decisions. What failed in New York is already reverberating through the global economy.
At stake is not an abstract principle but a concrete artery of the world economy. The Strait of Hormuz carries roughly one-fifth of seaborne oil. When that artery constricts, markets do what they always do: they panic first, and adjust later. Prices rise not only because supply is disrupted, but because uncertainty itself becomes a commodity — priced, traded, and amplified.
The veto matters because it removes the clearest path to coordinated international action. Without a UN mandate, efforts to restore shipping become fragmented, politically riskier, and potentially slower. Markets understand this instinctively. Traders are not just pricing today’s shortage; they are pricing tomorrow’s indecision. That is how oil can surge not only on lost barrels, but on lost confidence.
Moreover, confidence, once shaken, is expensive to rebuild.
The consequences extend far beyond energy markets. Higher crude prices cascade quickly into transport costs, food prices, and the everyday arithmetic of households. Insurance premiums for shipping climb. Supply chains stretch and slow. What begins as a geopolitical impasse becomes, within weeks, an inflationary wave.
For oil-importing countries, especially in the developing world, this is not an inconvenience — it is a shock with systemic implications.
First, there is the immediate hit: rising import bills. Governments that rely on imported fuel must now pay more for the same energy, often in hard currency. That widens trade deficits and puts pressure on already fragile currencies. A weaker currency, in turn, makes everything more expensive — including debt repayments.
Second, inflation follows. Energy costs seep into every sector, from agriculture to manufacturing. For households, particularly in low-income economies, this translates into higher food and transport prices — the very essentials that consume the largest share of income.
Third, fiscal space tightens. Governments face an unenviable choice: subsidise fuel and strain public finances, or pass costs on to citizens and risk social unrest. For many, neither option is sustainable.
Finally, there is the broader erosion of economic stability. Slower growth, higher borrowing costs, and capital outflows can converge into a familiar and dangerous pattern — one that, in past crises, has pushed vulnerable economies to the brink.
None of this is inevitable, but much of it is predictable.
There are short-term measures available. Strategic petroleum reserves can be released. Alternative supply routes can be activated. Diplomatic efforts can intensify. Multilateral institutions can provide emergency financing. However, these are, at best, partial remedies. They buy time; they do not resolve the underlying political deadlock.
Moreover, that is precisely the point.
The deeper concern is what this episode signals about the state of global governance. If the Security Council cannot act decisively in the face of a chokepoint crisis with clear global consequences, then the credibility of collective security — and by extension, economic stability — is called into question. In that vacuum, countries will increasingly turn to unilateral or ad hoc coalition responses, raising the risk of escalation and further fragmentation.
For non-oil-producing countries, the lesson is stark. Vulnerability to external shocks is not an abstract risk; it is a recurring reality. Diversifying energy sources, investing in strategic reserves, strengthening fiscal buffers, and building resilient social protection systems are no longer long-term aspirations — they are immediate necessities.
However, even the most prudent policies have limits when confronted with systemic failures at the global level.
The triple veto did more than block a resolution. It signalled a world in which geopolitical rivalry can override collective economic stability — where the costs of inaction are borne by those least able to bear them.
In the end, the price of oil is never just about oil. It is about politics, power, and the uneven distribution of both.
* This is a personal opinion and does not bind the institution the writer represents.
