Israel’s supply cutoff to Gaza sends prices soaring as aid groups race to distribute scarce stocks

JERUSALEM (AP) — Israel’s cutoff of food, fuel, medicine and other supplies to Gaza’s 2 million people has sent prices soaring and humanitarian groups into overdrive trying to distribute dwindling stocks to the most vulnerable.

The aid freeze has imperiled the tenuous progress aid workers say they have made to stave off famine over the past six weeks during Phase 1 of the ceasefire deal Israel and Hamas agreed to in January.

After more than 16 months of war, Gaza’s population is entirely dependent on trucked-in food and other aid. Most are displaced from their homes, and many need shelter. Fuel is needed to keep hospitals, water pumps, bakeries and telecommunications — as well as trucks delivering aid — operating.

Israel says the siege aims at pressuring Hamas to accept its spinoff ceasefire proposal. Israel has delayed moving to the second phase of the deal it reached with Hamas, during which the flow of aid was supposed to continue. Israeli Prime Minister Benjamin Netanyahu said Tuesday that he is prepared to raise the pressure and would not rule out cutting off all electricity to Gaza if Hamas doesn’t budge. Rights groups have called the cutoff a “starvation policy.”

Three days in, how is the cutoff impacting Gaza on the ground?

Food, fuel and shelter supplies are imperiled

There’s no major stockpile of tents in Gaza for Palestinians to rely on during the aid freeze, said Shaina Low, communications adviser for the Norwegian Refugee Council. The aid that came in during the ceasefire’s first phase was “nowhere near enough to address all of the needs,” she said.

“If it was enough, we wouldn’t have had infants dying from exposure because of lack of shelter materials and warm clothes and proper medical equipment to treat them,” she said.

Six infants in the Gaza Strip died from hypothermia during Phase 1.

Aid groups are now trying to assess what stocks they have in Gaza.

“We’re trying to figure out, what do we have? What would be the best use of our supply?” said Jonathan Crickx, chief of communication for UNICEF. “We never sat on supplies, so it’s not like there’s a huge amount left to distribute.”

He predicted a “catastrophic result” if the freeze continues.

During the ceasefire’s first phase, humanitarian agencies rushed in supplies and quickly ramped up their capabilities. Aid workers set up more food kitchens, health centers and water distribution points. With more fuel coming in, they were able to double the amount of water drawn from wells, according to the U.N. humanitarian coordination agency, or OCHA.

The United Nations and associated nongovernmental organizations brought in around 100,000 tents as hundreds of thousands of Palestinians tried to return to their homes, only to find them destroyed or too damaged to live in.

But the progress relied on the flow of aid continuing.

The International Organization for Migration now has 22,500 tents sitting in its warehouses in Jordan, after supply trucks brought back their undelivered cargo once entry was barred, said Karl Baker, the agency’s regional crisis coordinator.

The International Rescue Committee has 6.7 tons (14,771 pounds) of medicines and medical supplies waiting to enter Gaza, the delivery of which is now “highly uncertain,” said Bob Kitchen, vice president of the Emergencies and Humanitarian Action Department.

“It’s imperative that aid access is now immediately resumed. With humanitarian needs sky high, more aid access is required, not less,” Kitchen said.

Medical Aid for Palestinians said it has trucks stuck at the border carrying medicine, mattresses, and assistive devices for people with disabilities. The organization has some medicine and materials in reserve, said Tess Pope, MAP spokesperson, but, she said, “We don’t have stock that we can use during a long closure of Gaza.”

Prices are up

The U.N.’s humanitarian office said Tuesday that prices of vegetables and flour shot up after the crossings closed.

Sayed Mohamed al-Dairi walked through a bustling market in Gaza City just after the cutoff was announced. Prices that had just started to come down during the ceasefire had jumped back up, as sellers hiked the prices of their dwindling wares.

“The traders are massacring us, the traders are not merciful to us,” he said. “In the morning, the price of sugar was 5 shekels. Ask him now, the price has become 10 shekels.”

In the central Gaza city of Deir Al-Balah, one cigarette priced at 5 shekels ($1.37) before the cutoff now stands at 20 shekels ($5.49). One kilo of chicken (2.2 pounds) that was 21 shekels ($5.76) is now 50 shekels. ($13.72). Cooking gas has soared even more, from 90 shekels ($24.70) for 12 kilos (26.4 pounds) to 1,480 shekels ($406.24).

Following the Oct. 7, 2023 Hamas attack on Israel, Israel cut off all aid to Gaza for two weeks — a measure central to South Africa’s case accusing Israel of genocide in Gaza at the International Court of Justice. That took place as Israel launched the most intense phase of its aerial bombardment campaign on Gaza, one of the most aggressive in modern history.

With the ceasefire expiring and aid again frozen, Palestinians fear a repeat of that period.

“We are afraid that Netanyahu or Trump will launch a war more severe than the previous war,” said Abeer Obeid, a Palestinian woman from northern Gaza.

“The crossings are the means by which people obtain the basic necessities of life, why are they closing them,” she asked. “For the extension of the truce, they must find any other solution.”

Some Chinese commentators noted that Beijing had been bracing for tariffs of up to 60%. As of Tuesday, Trump has pushed import duties on Chinese products to 20%.

Tokyo’s Nikkei 225 index edged 0.2% higher to 37,418.24. In South Korea, the Kospi gained 1.2% to 2,558.13, while Australia’s S&P/ASX 200 shed 1.2% to 8,141.10.

On Tuesday, U.S. stocks racked up more losses on Wall Street as the trade war between the U.S. and its key trading partners escalated.

The Trump administration imposed 25% tariffs on imports from Canada and Mexico starting Tuesday as well as doubling tariffs for Chinese exports. All three countries have announced retaliatory actions, sparking worries about a slowdown in the global economy.

“The global trade outlook for 2025 is marked by solid growth amid significant challenges, many of which can be traced back to the policies proposed by U.S. President Trump,” economists at ING said in a report.

But global trade is diverse, with the United States accounting for just 13.6% of total global exports and a similar share of global imports. China’s exports to the rest of Asia have been surging and that can help offset reduced trade with the United States, they noted.

On Tuesday, the S&P 500 fell 1.2%, with more than 80% of the stocks in the benchmark index closing lower. The Dow slid 1.6% and the Nasdaq composite slipped 0.4%.

The market could soon face more twists in the tariff drama. After Tuesday’s closing bell, Commerce Secretary Howard Lutnick told Fox Business News that the U.S. would likely meet Canada and Mexico “in the middle” on tariffs, with an announcement coming as soon as Wednesday.

The market rally after Trump’s election in November had been built largely on hopes for policies that would strengthen the U.S. economy and businesses. Worries about tariffs raising consumer prices and reigniting inflation have been weighing on both the economy and Wall Street.

They’re also prompting warnings from retailers, given signs that U.S. households are becoming more pessimistic about inflation and pulling back on spending. Consumer spending has essentially driven U.S. economic growth in the face of high interest rates.

Retaliations against the higher tariffs were swift.

China responded to new U.S. tariffs by announcing it will impose additional tariffs of up to 15% on imports of key U.S. farm products, including chicken, pork, soy and beef, and expanded controls on doing business with key U.S. companies. Canada plans on slapping tariffs on more than $100 billion of American goods over the course of 21 days. Mexico also plans tariffs on goods imported from the U.S.

In other dealings early Wednesday, U.S. benchmark crude oil lost 40 cents to $67.86 per barrel, while Brent crude, the international standard, fell 12 cents to $70.92 per barrel.

The U.S. dollar fell to 149.35 Japanese yen from 149.82 yen. The euro rose to $1.0715 from $1.0626.

Bitcoin was trading at about $88,700 according to CoinDesk.

Comments by U.S. President Donald Trump in a speech to Congress and the nation appeared to have scant impact on world markets. The future for the S&P 500 was up 0.6%, while that for the Dow Jones Industrial Average gained 0.5%.

Germany’s DAX surged 2.4% to 22,958.74 as the prospective partners in the country’s next government said they want to loosen rules on limiting debt to allow for higher defense spending, an issue that has gained urgency given the wavering U.S. commitment to European allies.

The CAC 40 in Paris jumped 1.9% to 8,197.43, while Britain’s FTSE 100 advanced 0.7% to 8,819.57.

China announced it intends to keep its economy growing at around a 5% annual pace in 2025, in line with last year’s target, as it opened the annual session of its largely ceremonial legislature. Premier Li Qiang also promised more government spending and other measures to support growth.