The blockade of the strait through which an enormous share of world energy passes threatens the markets: oil tankers stopped, exports slowed down and the risk that the increase in oil and gas will also impact food prices.
While the attacks on Iran continue, the Strait of Hormuz remains the center of the energy crisis. Since last Saturday, naval traffic has been almost completely at a standstill. According to ship tracking data, normally approx 80 oil and gas tankers they cross the strait every day. Only two passed on Monday, while the following day only one oil tanker attempted to transit. None yesterday. Hundreds of ships are stopped on both sides of the strait and many shipping companies have suspended routes in the area.
The traffic paralysis has directly affected theenergy exports from the Gulf countries. In Iraq, production was reduced by approx 1.5 million barrels per day because the storage tanks are filling up and the tankers are unable to load the crude oil. In fact, today the most urgent problem is getting oil tankers into the Gulf to store production so that it doesn’t stop, rather than getting them out. Iraqi authorities have warned that if the situation is not resolved quickly, the cuts could reach 3 million barrels per day. Also Saudi Arabia, United Arab Emirates and Kuwait are experiencing difficulties in loading oil for export.
Energy plants hit in the Gulf
Different energy systems they were hit during drone and missile attacks and interceptions. In Qatar, production at the giant gas liquefaction plant has been suspended Ras Laffanwhich represents about a fifth of the global supply of LNG. In Saudi Arabia the refinery of Ras Tanuraone of the main refining hubs in the country with a capacity of 550,000 barrels per daystopped operations after a fire caused by debris from intercepted drones. In the United Arab Emirates a fire hit the oil terminal of Fujairahone of the most important storage hubs in the Middle East. Attacks and fires were also reported in the port of Duqm in Oman and at a power plant in Kuwait. Some oil tankers and commercial ships were hit or damaged in waters near the strait.
Energy prices under pressure
The crisis has pushed up i prices of energy raw materialsbut yesterday there was a pause in the increases. The Brent oil had risen up to 85 dollars a barrel Tuesday but yesterday it was contained and remained around $81. Also the European gas at TTFafter the maximum of 65.79 euros/MWh on Tuesday, yesterday it dropped and closed at 48.77 euros/MWh. Refined products also reacted with strong increases in the first two days of open markets after the attack, but yesterday wholesale diesel and petrol have remained essentially still, while the prices at the pump in Europe and the USA they have risen significantly.
Yesterday’s pause in increases was due to the news, which was later denied by Tehranof a request for negotiation by the Iranians.
The American initiative to reopen Hormuz
However, the initiative of Donald Trump to encourage the resumption of naval traffic in the Strait of Hormuz. On Tuesday evening the American president announced that the US Navy is ready to escort oil tankers passing through the Strait of Hormuz. Washington also promised insurance guarantees and financial coverage for shipping companies and shipowners operating in the region. Shipowners welcomed the initiative with caution, pointing out that protecting all the oil tankers in the region would require a very large number of naval vessels and that organizing naval convoys would take time.
The risks for inflation and the global economy
The Iranian attacks against energy infrastructures and commercial ships have indirectly involved several Gulf countries, which have seen plants or infrastructures damaged or threatened. This provoked a reaction from surrounding countries and further isolated Tehran on the political and military level. Meanwhile, the economic consequences of the crisis are starting to worry governments and central banks. The increase of oil and gas prices it risks reigniting inflation just as many economies were trying to bring it back under control. The increase in the diesel and fuels could quickly be reflected in transport costs and therefore on food priceswhich in Italy, for example, depend to a large extent on road logistics.
Asia seeks alternative supplies
Even theAsia observe the evolution of the crisis carefully. Many countries in the region are highly dependent on energy supplies from the Middle East. China, India, Japan and South Korea they are among the main importers of oil and gas that pass through the Strait of Hormuz. With shipments blocked, several Asian refiners are looking for alternative supplies. According to rumors circulating on the market yesterday, some refiners Indians they contacted suppliers Russians to get deliveries in March and April.
Also yesterday it became known that, according to some sources, the White House will exempt the German unit of the Russian oil company Rosneft from sanctions. This would be one of the results of the visit of Friedrich Merz in Washington in recent days.
There China then it is the world’s largest importer of oil and gas. Imports from Iran represent the 13% of its crude oil imports. Overall, a third of China’s oil and 25% of its gas imports they pass through the Strait of Hormuz. The use of huge numbers strategic oil reserves it’s the first step, but it’s logical that Beijing is thinking of strengthening relations with the company even more Russiawhich already provides the 20% of the oil consumed in China. This will still have a cost for Beijing, because Moscow will almost certainly raise the price.
