A short time ago, most people wouldn’t have batted an eyelash over a ship passing through the Strait of Hormuz. But 55-days into the war on Iran, energy traders are locked on every shiftment in the narrow passage, through which huge volumes of the world’s oil, gas, fuel and fertilizer applyd to flow.
With no finish in sight to US and Iranian efforts to blockade the channel, alarms are ringing louder over the consequences to the global economy. Goldman Sachs bankers figure almost three-fifths of Persian Gulf oil exports have ceased.
With dwindling fossil fuel reserves of its own, the situation views particularly dire in Europe. The International Energy Agency reported today that tight gas supplies will extfinish into 2027. Scarcity on traded markets is already revealing up in the data, with liquified natural gas imports dropping for the first time in more than a year. European Union policycreaters are adding an additional challenge by cutting short term purchases of Russian LNG, which last year covered a significant part of the bloc’s consumption.
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