The Strait of Hormuz crisis and the Bab al-Mandab Strait crisis have shown that narrow maritime passages can be used as political weapons in future conflicts. North Sea Route (NSR) or the Arctic route has come into greater focus. Russia has established laws and codes for regulating passage through the NSR.
After Iran shut down the Strait of Hormuz, an export of at least 10 million barrels of oil a day from the Middle East was lost. China cut its imports from 11 million barrels a day to 7.7 million due to the war in Iran. The drop in imports from China effectively kept the global oil supply from suffering the dramatic shocks experts predicted. China has vast oil reserves and its reliance on crude has dropped thanks to its investments in electric vehicles and high-speed railroads.
There is an 82% chance of an El Niño emerging between May and July. The pending weather will exacerbate the issue of oil prices, which have risen by more than 25% since disruption to the Strait of Hormuz, a vital shipping lane, following U.S. and Israeli attacks on Iran. For the nearly 96,000 artisanal fishers in Peru, the impact has been worse because they buy from chatas (supply barges) which do not receive government subsidies. Many fishers have seen profits fall by 40%.
The World Bank has downgraded growth forecasts for two-thirds of countries in its half-yearly Global Economic Prospects report. It is making up to $100bn available over the next 15 months for the countries worst affected by the knock-on effects of the Middle East war. Developed countries will have endured a decade without managing to narrow the gap with advanced economies.
East Africa is no longer a sideshow in global strategy. The region’s ports, sea lanes, and gas fields have become part of a wider contest for a region stretching from the Gulf to the Pacific Ocean. China, the European Union, and the U.S. have all launched initiatives to ensure security, access to resources, and shipping lanes in the region. India is paying closer attention to Africa. The Gulf states are already there. China has built roads, railways and ports across the continent under the banner of the Belt and Road Initiative. Tanzania renegotiated the Bagamoyo port project.
Brent crude oil from the North Sea has been priced at less than $100 per barrel since the end of May. Mutual attacks by the USA and Iran and reports of a closure of the Strait of Hormuz did not cause price jumps on the oil market. Commodity experts recognize a number of factors that are slowing the rise in oil prices.