Rising oil prices caused by a potential blockage of the Strait of Hormuz would hit the most vulnerable economies hardest and could affect around one billion people, according to a report by the United Nations Conference on Trade and Development (UNCTAD), The Caspian Post informs.

The UN agency noted that out of the world’s 75 most vulnerable economies-including least developed countries and small island states-65 are dependent on oil imports. For these countries, higher energy prices would significantly increase costs and force governments to make difficult choices between spending on fuel and funding essential public services.

According to the report, this would ultimately affect the lives of nearly one billion people.

UNCTAD official Marcelo Risi said: “We are talking about 983 million people. A third of them live below the poverty line - on less than $3 a day.”

The organization further stated that if oil prices continue to rise by 50%, the cost of oil imports in vulnerable economies could increase by $20 billion per year. As a result, many countries would be forced to seek alternative supply sources.

The report also warned that rising oil prices could fuel inflation and potentially affect even net oil-exporting countries. It could also contribute to a global economic slowdown. In addition, higher oil import costs may worsen fiscal deficits, weaken exchange rates, increase interest rates, and tighten credit conditions, particularly in economies with limited fiscal space, UNCTAD cautioned.