Sri Lanka has been identified as one of the world’s most vulnerable nations to a sudden shutdown of the Strait of Hormuz, according to a March 2026 report by the Kiel Institute for the World Economy.
The study, titled “The Cost of Closing the Strait of Hormuz: Energy Bottlenecks and Global Food Security,” ranks Sri Lanka as the country facing the second-steepest rise in food prices globally under a short-term closure scenario.
It warns that a full shutdown of the Strait could trigger a severe food security crisis in Sri Lanka, with food prices projected to rise by more than 15 percent.
While global focus is often on oil supply disruptions, the report highlights that for South Asian countries like Sri Lanka, the impact would quickly escalate into a major food crisis.
Researchers explained that the Strait serves as a critical global “bottleneck,” carrying about one-fifth of the world’s oil and one-quarter of its liquefied natural gas, meaning any closure would have widespread economic consequences.
The report notes that Sri Lanka faces a “triple threat” due to its heavy dependence on imported energy, reliance on imported fertilizers, and a large agricultural sector with limited domestic alternatives.
The timing of such a disruption could worsen the impact, especially if it occurs during the March–April planting season, when shortages of nitrogen fertilizer could lead to reduced harvests or crop failures.
The study also highlights global inequality in resilience, stating that while countries like the United States may experience minimal economic impact, nations in South Asia and sub-Saharan Africa could face losses many times greater.
Describing the situation as more than just an energy issue, the report emphasizes that a Hormuz closure would directly affect food affordability, particularly for vulnerable populations.
To reduce risks, the Kiel Institute recommends that countries like Sri Lanka prioritize fertilizer security alongside energy security, including the potential establishment of strategic fertilizer reserves.
