On Sunday, April 5, Donald Trump reaffirmed his ultimatum to Iran on his social network. He demands the reopening of the Strait of Hormuz. This passage is the center of attention due to the risks it poses to the global economy.
Since the beginning of the war, the entire oil production tool has been weakened, with refineries being bombed and fuel depots engulfed in flames throughout the Gulf region. In addition, the Strait of Hormuz, the main export route, is paralyzed. Ships are being targeted by Iran.
In total, 670 ships are currently stuck in the strait. Gulf countries had no choice but to drastically reduce their oil production, dropping from 26.7 million barrels per day to 15.2 million currently. All oil-producing countries are affected: -25% for Saudi Arabia, -55% for the United Arab Emirates, over 65% decrease for Kuwait and Qatar, -78% for Iraq, and even a complete halt in Bahrain.
“We are really facing a scenario almost catastrophic, completely unprecedented. If the conflict were to last for months, we would see inflation and a global recession taking place,” explains Homayoun Falakshahi, head of oil analysis at Kpler.
Already, the repercussions are global. Throughout Europe, like France, Italy, and Spain, pump prices are soaring. Further east, Australia is experiencing its first shortages. And Asia, dependent on 80% of Gulf oil, is suffocating. In Thailand, vehicles are flooding gas stations, causing massive traffic jams. In India, endless queues of tuk-tuks, at a standstill, are forming. Rising prices are also bringing Filipinos to the streets. In South Korea, the first consequence on the petrochemical industry: a total shortage of garbage bags in a supermarket in Seoul.
On the contrary, other countries are benefiting, including Russia and its tankers. With the partial lifting of sanctions, the country is exporting at very high prices, which will help finance its war in Ukraine.
