Assessing the Impact of Strait of Hormuz Disruption on Somalia’s Trade-flow System: The Case Study for Puntland State of Somalia

<p>This report assesses how Gulf geopolitical tensions and potential Strait of Hormuz disruption affect Somalia’s trade-flow system, using Puntland, State of Somalia, as a case study. It situates Somalia within a highly import-dependent and externally exposed trade structure, where food, fuel, fertilizers, construction inputs, and other essential commodities are transmitted through fragile maritime corridors. The study applies a mixed-methods approach, combining secondary macroeconomic and trade data, port-level administrative information, CPI trends, and key informant interviews with market actors, including importers, fuel distributors, livestock exporters, LPG traders, and construction-material suppliers.</p> <p>The findings show that Gulf-linked disruption does not simply create a temporary trade shock; it restructures Somalia’s commercial environment into a high-cost and low-predictability system. Rising freight charges, war-risk insurance premiums, fuel costs, and delivery delays have increased import costs and contributed to cost-push inflation. Puntland CPI evidence shows notable upward pressure from March 2026 in food, energy, cooking gas, and construction materials. On the export side, livestock trade remains highly vulnerable because it is seasonally concentrated around Hajj demand and heavily dependent on Gulf markets. Bosaso Port data indicates declining and volatile export vessel activity, while import flows remain high but irregular.</p> <p>The report concludes that Somalia’s trade vulnerability is structural, reflecting import dependence, limited export diversification, climate stress, narrow fiscal capacity, and weak adaptive infrastructure. It recommends strategic food and fuel reserves, dedicated storage infrastructure, temporary controls on the re-export of strategic commodities, climate-resilient livestock systems, diversified export markets, and investment in domestic productive sectors.</p>