Commodities
Home›Commodities›Energy›IEA warns Strait of Hormuz disruption could hit global…
IEA warns Strait of Hormuz disruption could hit global economy in weeks
Oil prices rose about 13% since last Friday as tanker traffic through the Strait of Hormuz fell to five-week lows.
The International Energy Agency warned the world has only weeks to avoid an economic shock from a renewed Middle East escalation, including a halt to tanker traffic through the Strait of Hormuz, according to statements from IEA executive director Fatih Birol reported by OilPrice.
Oil tanker transits through Hormuz had started to rebound after a U.S.-Iran memorandum of understanding, but traffic “came to an abrupt halt” late last week, with daily transits plunging to five-week lows. The report cited Iran strikes on commercial vessels transiting the strait, including two supertankers operated by the Abu Dhabi national oil company of the UAE, alongside U.S. strikes on Iran and a reinstated naval blockade aimed at preventing Iran-linked tankers from loading and exporting Iranian oil.
OilPrice said the “rush” by Middle Eastern producers to evacuate oil amassed in the Gulf has stopped, helping push oil prices higher by about 13% since last Friday. It added that oil, bond, and equity markets began pricing in additional disruption to oil flows, while economists and governments are bracing for another potential fuel price and inflation spike.
Birol warned that if the Strait of Hormuz remains closed, global economies could face new difficulties. In the Bloomberg interview referenced by OilPrice, he said the timeframe is measured in weeks, not months.