Strait of Hormuz May Not Return to Normal, Whether It’s Open or Closed
The energy industry is planning for a future where the choke point on Iran’s southern coast is a lot less important.
The energy industry is planning for a future where the choke point on Iran’s southern coast is a lot less important.
The gas-rich Gulf nation is in a state of “strategic shock” after the war dealt a serious blow to its economy, sending ripples around the world.
Analysts said energy and shipping companies would be reluctant to fully restore operations until they were confident that hostilities were over.
Oil markets shrugged it off, but the effort to hurt Iran could provoke retaliation that inflicts more damage on energy assets and the global economy.
European countries declined to take part in the action, which is designed to pressure Iran into making concessions by cutting off its oil income.
Analysts said oil and natural gas energy companies would not quickly restore production unless attacks stopped and ships started moving through the Strait of Hormuz.
Several permanent members of the Security Council opposed the resolution, drafted by Bahrain in coordination with its Gulf neighbors, officials said.
The interconnectedness of global energy markets means that the effects of Iran’s blockade of the waterway are not limited to countries directly dependent on oil from the Middle East.
The U.S. and other exporters are poised for a windfall, but disruptions to Persian Gulf supplies are also pushing gas-buying countries to consider alternatives like coal, solar and nuclear energy.
Fertilizer prices are climbing as a result of disruptions in the Middle East, putting global food supplies at risk.