The biggest oil supply shock in history has reached the one-month threshold. Prices have risen sharply, economic growth forecasts are reduced globally, and shortages are beginning to appear across Asia, from Thailand to Pakistan. And the energy industry warns that this crisis is just beginning and is spreading to the West. “In the coming weeks,” experts warn, there will be a shortage of oil in Europe, reports Bloomberg in a comprehensive analysis of the impact of the blockade of the Strait of Hormuz on the global economy.
Bloomberg writes that in conversations held by journalists with over thirty oil and gas traders, directors, brokers, carriers, and advisors in the last week, the same message was repeated: the world still hasn’t understood the gravity of the situation.
Many have drawn parallels with the oil shock of the 1970s, warning that the closure of the Strait of Hormuz could lead to an even greater crisis. The fuel crisis hitting Asia will soon begin to spread to the West, they said.
Europe will likely face price increases to secure its goods and risks having diesel shortages in the coming weeks. If the strait remains closed, the world will have to significantly reduce its oil consumption and gas, but not before prices rise to a level that forces consumers and businesses to fly, drive and spend much less.
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