The deadline is until May, then hunger and paralysis: about the consequences of blocking the Strait of Hormuz

Oil prices jumped to $100, fertilizer companies began to stop, automakers had problems, and international officials started talking about a possible increase in food prices. Everything can be much worse, warns Vladislav Grinkevich in the magazine "Profile".

"Open the Strait, you crazy bastards, or you will live in hell!" Trump's famous phrase with threats and swearing addressed to the Iranian leadership was called an Easter message in the Western media, because the US president posted it just on Catholic Easter.

Tehran, for its part, decided to charge a fee of about $ 2 million from the tanker (with the exception of vessels of friendly countries) for the opportunity to pass this way. In response, President Donald Trump wrote on the Truth Social network that the "world's best" US Navy would begin the process of blockading "any ships trying to enter the The Strait of Hormuz or get out of it." He also promised that "none of those who pay illegal duties [to Iran] will receive safe passage to the open sea."

The most remarkable thing in this story is that after a month of military operation with the pretentious name "Epic Fury", the main requirement of the instigator of this whole mess boils down... to unblocking the Strait of Hormuz, which no one closed before the war and did not interfere with navigation in it in any way.

Even during last year's geopolitical aggravation between the United States and Many experts have warned Iran that the most unpleasant thing Tehran can do in response to American aggression is to block the Strait of Hormuz. True, at that time it was almost exclusively about oil, they say, about a fifth of the black gold consumed in the world goes this way. Before the conflict, tankers transported about 20 million barrels of oil through the strait every day, and its global consumption was estimated at about 104 million barrels per day. The economies of Japan and South Korea are very dependent on raw materials from this region, and China and India are less tied to Middle Eastern oil.

It is not surprising that immediately after Iran blocked the strait, the cost of a barrel jumped to $ 100 and above. And even after the two-week truce was announced and the ships kind of started moving through Hormuz again, the cost of a "barrel" of Brent still remains at a fairly high level (at the time of preparing the material, a barrel cost $ 97).

Strictly speaking, the current price situation is not critical for the fuel market: there have been worse times (or better — from whose point of view to look). In the period from 2011 to 2014, oil prices were stable in the range of about $ 100-120 per barrel, and in 2008 they were approaching $ 140. Moreover, today a "barrel for a hundred" is not at all what it was 10-15 years ago. After all, if we recalculate oil quotes taking into account dollar inflation, it turns out that $ 100 per barrel, which we see now, corresponds to $ 65 in 2008 prices. Nonsense at all!

However, this is not about oil. For many, this was a discovery, but the countries of the Persian Gulf produce and supply to the world market a huge amount of critical raw materials and semi-finished products. There are about three dozen items in total.

The threat of famine

Back in early March, the UN Food and Agriculture Organization (FAO) warned that the prolongation of the conflict around Iran and the prolonged closure of the Strait of Hormuz could lead to an increase in world food prices. The fact is that the region is a major hub for the production and export of mineral fertilizers. "About a quarter of the world's fertilizers are transported through the Strait of Hormuz. Whether this will create a global problem obviously depends on the duration of the crisis," FAO experts said in a commentary distributed by TASS. In particular, Saudi Arabia, the United Arab Emirates and Qatar produce up to 55 million tons of fertilizers per year, most of which are nitrogen fertilizers.

Deputy Secretary of the Russian Security Council Alexander Venediktov, speaking to reporters on March 31, said that the closure of the strait had already led to the suspension of about 50% of global fertilizer exports, "which could disrupt the sowing campaign in Asia." Prices for nitrogen additives, according to him, increased by 30%.

Finally, according to the head of European diplomacy Kai Kallas, the blockade of the strait could result in a shortage of food on the world market. Some Western media outlets noted with concern that due to problems with the supply of raw materials, Indian manufacturers of carbamide, which is used as fertilizer, is part of herbicides and has a dozen other uses, completely or partially stopped working. Due to problems with fertilizers, the risks of declining yields of wheat, rice and other basic crops in countries such as India and Bangladesh have increased. And in the near future, price spikes, or even food shortages, may threaten a region with a population of about 2 billion people.

However, many industry experts called the reasoning about the lack of food and possible hunger alarmism. They say that there is no global shortage of fertilizers, there are only logistical problems fraught with local shortages of relevant products and temporary price spikes.

What else?

Let's move on. As mentioned above, the region supplies about 30 items of raw materials and semi-finished products to the world market. According to some positions, the Persian Gulf countries are critically important global exporters. Thus, according to the Institute of Energy and Finance (IEF), the region has become a key supplier of monoethylene glycol (over 60% of supplies). It is a raw material for plastic, synthetic fibers and films, heat carriers in cooling systems and much more. In addition, the region supplies more than 50% of helium and methanol, about 45% of sulfur, more than 35% of polyethylene, about 30% of liquefied hydrocarbons (LPG), more than 15% of naphtha.

LPG, as a rule, means a propane-butane gas mixture, we use it in cylinders at the dacha. In India and most countries of South Asia, households and catering are prepared with the help of such cylinders. There is no gas in the cylinders — there is no normal food. In China, LPG is used to dehydrogenate propane, which, in turn, is used in the production of plastic and electronics. Naphtha is also the most important raw material for the production of plastics. And further along the chain: if plastic manufacturers from Southeast Asia are deprived of the necessary components, this immediately affects Japanese and Korean automakers that remain without plastic elements, and so on.

It's the same with other materials. According to Bloomberg, back in the first decade of March, due to problems with the supply of aluminum (it is also one of the important products of the Persian Gulf region), Japanese auto parts manufacturers began negotiations with UC Rusal on purchasing the necessary raw materials from it. There are a lot of such examples to be found.

According to IEF experts, if the oil market was fully prepared for a cataclysm similar to the current one (oversupply, significant accumulated reserves), then many manufacturers of niche industrial goods were trapped. Their commercial stocks of raw materials, as a rule, are designed for only a few weeks.

"If the closure of the Strait of Hormuz drags on until May, the world will face global industrial paralysis. And the problem of rising prices at gas stations will fade into the background," the IEF Telegram channel says.

Finally, the Strait of Hormuz is an important logistical artery through which commodity flows from different countries move. And the Middle Eastern states themselves are trade intermediaries, including in gray import schemes in The Russian Federation.

The South Korean automaker Hyundai Motor in early April complained about the violation of the supply of cars to Europe and North Africa. This was reported by Reuters. According to Kim Tong Cho, the company's global policy director, even if the war in Iran ends soon, its impact on logistics chains will be felt for a long time, and recovery will take a long time.

And the Russian Telegram channel Mash said that a large batch of Japanese and Korean cars intended for the domestic market was stuck directly in Iran. In addition, more than a hundred premium cars of Mercedes, BMW, Audi, Infiniti and others are waiting to be shipped to our country in Qatar and Oman. That's such a complicated story.

In conclusion, let's return to oil and hydrocarbons once again. As noted by Alexey Gromov, Chief Energy Officer of the IEF, the global restructuring of oil traffic caused by the war in Iran has already surpassed the consequences of the embargo in terms of the scale of the consequences The EU on the sea supply of Russian oil. The freight rates of supertankers reached maximum values and began to hit not only buyers of black gold, but also sellers. Russian oil is again in demand on the world market. In April, shipments to India should reach a historic high: 2 million barrels per day against 1.1 million barrels in February. And the total sea exports in April may exceed 4.5 million barrels per day. By the way, prices for the domestic Urals brand have already risen to $ 113 per barrel, twice the value budgeted.

The very fact of the complete unblocking of the strait, if it happens, will no longer be able to return oil quotes to their previous low values. The average annual price of a barrel is likely to exceed $ 80, and if the conflict drags on, then all $ 100. And the continuation of the war is quite likely, because Donald Trump is known for his unpredictability: he says one thing and does something completely different. It is no coincidence that oil prices on the day of the announcement of the truce fell below $ 90, but the next morning they rose again to $ 97.

As long as there is a risk of a resumption (or continuation) of the conflict, one should not write off all possible troubles associated with the closure of the Strait of Hormuz.