On Sunday, April 5, Donald Trump reiterated 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 to the global economy.
Since the beginning of the war, the entire oil production tool has been weakened, with refineries bombed and fuel depots engulfed in flames throughout the Gulf region. In addition, the Strait of Hormuz, the main export route, is paralyzed. Ships there are targeted by Iran.
Currently, 670 ships are blocked in the strait. Gulf countries had no choice. They drastically reduced their black gold 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, more than 65% for Kuwait and Qatar, -78% for Iraq, and even a complete stop in Bahrain.
“We are really on the brink of an almost catastrophic scenario, totally 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. Across Europe, like France, Italy, and Spain, fuel prices are soaring. Further east, Australia is facing its first shortages. And Asia, dependent on 80% of Gulf oil, is suffocated. In Thailand, vehicles overwhelm gas stations, causing massive traffic jams. In India, endless lines of tuk-tuks form at standstills. The prices also drive Filipinos to the streets. In South Korea, the first consequence on the petrochemical industry is a total shortage of trash bags in a supermarket in Seoul.
Conversely, other countries are benefiting, including Russia and its tankers. With the partial lifting of sanctions, the country exports at very high prices, enough to replenish its coffers to finance its war in Ukraine.
